A company copes with backlash against the raise that roared

Three months ago, Mr. Price, 31, announced he was setting a new minimum salary of $70,000 at his Seattle credit card processing firm, Gravity Payments, and slashing his own million-dollar pay package to do it. He wasn’t thinking about the current political clamor over low wages or the growing gap between rich and poor, he said. He was just thinking of the 120 people who worked for him and, let’s be honest, a bit of free publicity. The idea struck him when a friend shared her worries about paying both her rent and student loans on a $40,000 salary. He realized a lot of his own employees earned that or less.

Whether you support his actions or not, ask yourself this question: what does it say about our society that a young man slashing his own salary to increase that of his employees draws more ire than a CEO raising his own salary to 70 times that of an average employee?

Most mystifying of all, though, are the employees leaving because their coworkers got a pay raise to $70000, while they themselves already earned $70000. I don’t understand this mindset. You still have your salary. You still get your $70000, except now your fellow men and women on the work floor also get it. Is your self-worth really derived from earning more than the people around you? Is your sense of self really dictated by how much more you earn than Jim from accounting or Alice from engineering?

Maybe I’m just too Dutch and too little American to understand this mindset, but I firmly believe this world would be a massively better place if more CEOs cut their own salaries to raise that of their employees.

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I don’t in principle think its bad for a CEO to make a lot of money, unless they are really bad at their job. That said I do find this interesting. I can see how someone might be annoyed if they have been working hard trying to get a pay raise, and someone else gets one instead even though they’ve been doing the same crummy job for years and years. Not to say thats happened in this case, but if it did. In America at least, and I think other places, a pay raise is a form of recognition for hard work and dedication, its more than just money. Not to say its right but some may view it as a slap in the face to see everyone else’s pay get raised but their own and I don’t think that necessarily makes them mean people.

In America at least, and I think other places, a pay raise is a form of recognition for hard work and dedication, its more than just money. Not to say its right but some may view it as a slap in the face to see everyone else’s pay get raised but their own and I don’t think that necessarily makes them mean people.

This seems to be the case here. It’s not so much the increased minium wage that caused the internal dissent, it’s the pay-raise implementation (regarded as unfair reward/recognition of hard work and dedication).

I’m sure this could have been handled better – the article indicates that the new wages were being introduced in phases but perhaps it needed to be implemented even more slowly.

That said….. the 70k’ers have no right to complain when their CEO is making the same amount they are.

They didn’t complain, they quit, and they have every right to do so. Its a job, not slavery.

If given a choice between a 75k a year job working for this guy and a 75k job working for virtually anyone else I would go elsewhere in a heartbeat, because at least elsewhere my chances for earning further opportunities would be higher than zero… This guy’s actions demonstrate he places no value on individual contribution, he even calls people selfish for suggesting that maybe there job role is worth more to the company than others.

Sorry, I already give to charity. I have no desire to work for someone who steals it from me. Maybe one day I will be as rich as he is and I will have to freedom to act so selflessly, but right now I have 3 kids to put through college and my time is all I have – I want to get as much money for it as the market will bear.

I don’t in principle think its bad for a CEO to make a lot of money, unless they are really bad at their job. That said I do find this interesting. I can see how someone might be annoyed if they have been working hard trying to get a pay raise, and someone else gets one instead even though they’ve been doing the same crummy job for years and years. Not to say thats happened in this case, but if it did. In America at least, and I think other places, a pay raise is a form of recognition for hard work and dedication, its more than just money. Not to say its right but some may view it as a slap in the face to see everyone else’s pay get raised but their own and I don’t think that necessarily makes them mean people.

Does anyone wonder why the poorly payed are “slackers”? If you have to work 250+ hours per month just to make it through, you won’t be very productive at your main job.

Furthermore, the CEOs making large amounts of money makes sense when the ratio is 1:20. However, in a lot of companies the ration is reaching 1:500. The CEOs that are getting the 1:500 are the ones that keep minimum pay across the board in large companies (thus “saving” money) or outsourcing the jobs in developing countries. If they had reasonable salaries for CxOs, you wouldn’t need to outsource.

I don’t in principle think its bad for a CEO to make a lot of money, unless they are really bad at their job. That said I do find this interesting. I can see how someone might be annoyed if they have been working hard trying to get a pay raise, and someone else gets one instead even though they’ve been doing the same crummy job for years and years. Not to say thats happened in this case, but if it did. In America at least, and I think other places, a pay raise is a form of recognition for hard work and dedication, its more than just money. Not to say its right but some may view it as a slap in the face to see everyone else’s pay get raised but their own and I don’t think that necessarily makes them mean people.

That being said there is a difference between a CEO being paid more vs. being paid an obscene amount of money. For example, if your average worker is earning $70,000 then it is in the realm of acceptance by most that the CEO will earn something like $700,000 to $1million. The problem starts to occur when you end up with massive pay differences such as the average worker earning $70,000 and the CEO is earning $30million per year. There is a fine line between most people accepting that the ‘higher up the food chain the more risk and the higher the reward’ vs. the point when the difference becomes obscene to the point of being disgusting. Maybe as a New Zealander I’m too left wing for my own good but it does make my stomach churn when people living in $100million mansions and earning $30million is some how as seen as morally acceptable whilst that excess casts a shadow over a large section of society who don’t have access to healthcare, healthy food and healthy affordable housing.

There is a fine line between most people accepting that the ‘higher up the food chain the more risk and the higher the reward’ vs. the point when the difference becomes obscene to the point of being disgusting.

I’m not even sure if I agree with that. At the very highest levels, CEOs seem to float around in a cloud of board memberships and new companies entirely independent of how well the companies they managed performed. At both those and the slightly lower levels, the sheer amount of money itself is a risk reducer: If you can save up some millions first, it doesn’t matter if you crater the company; in the worst case you can retire and live off that money.

In comparison, a specialised engineer making $70k seems to be at a larger personal risk – if the company fails he can only hope there’s another similar position to be found; if he’s not young it might be hard to get hired again.

You still get your $70000, except now your fellow men and women on the work floor also get it. Is your self-worth really derived from earning more than the people around you?

Yes. Relative compensation (in the same sort of position) is generally a measure of how much you contribute to the company. If you’ve been busting your ass for years to get up to 70k and some slacker gets a 30k raise overnight it devalues all the work you put in. Why should you give half a shit what happens to the company if they have no interest in rewarding effort?

I think there is also the aspect of a lower level worker such as a janitor getting the same wage as you – when say you are an accountant or software engineer. Both of those positions take years of education in today’s market to get the decent job, while ‘almost anyone’ can be a janitor.

I think there is also the aspect of a lower level worker such as a janitor getting the same wage as you – when say you are an accountant or software engineer. Both of those positions take years of education in today’s market to get the decent job, while ‘almost anyone’ can be a janitor.

And you have good reason to believe that the people who got the raise were all janitors? And everyone who were already at that level deserved it?

You know what, I’m a software engineer, and I wouldn’t begrudge a janitor who got paid close to what I get paid. The janitor is doing a job I really don’t want to do, but is necessary. It took years of education to get where I am. But that janitor will have years of touching stuff I don’t want to.

No matter how much I think I contribute to the company’s core business compared to the janitor, I can tell you nobody would like to turn up to contribute to the core business if the toilets weren’t cleaned after just one day.

It’s sickening that it’s not enough that you earn what you do and get to do something you enjoy; you also have to be able to look down upon others to get a sense of self.

I’m with you on this one where custodial jobs are concerned. I would hope that my company would value my time as better spent not cleaning toilets or mopping floors but I would not begrudge the guy doing it if he made my salary. My expectation is that the janitor would work just as diligently as I do to earn that money.

Value is a key word here, I do believe that a good many corporate CEO’s are overpaid. I am not convinced that the typical figurehead atop a board of directors is really worth millions to appease stockholder angst. Not seeing the real value here since these folks seldom get their hands dirty.

This particular CEO represents the American norm. A smaller corporation, probably privately owned, where the CEO leads a small core management team. If he wants to spread the wealth then he probably has plenty to spread around, so go for it. I wish him all the best whatever the motivation.

Salary equivalence does not equal liquidity equivalence. A Master’s student likely has a higher wage then a High School student but also more debt burden from the education cost.

It is a big thumb in the eye to employees to increase the liquidity of employees who are making it (but struggling) at one pay level but not at others who may be making it (but also struggling ) at a higher pay level.

A fairer use of the money would be raise the minimum salary to a lower level say 35-40k a year. Then use the difference to lower to cost of health care at the business and increase matching to the retirement accounts. This increases the liquidity of all employees so everyone sees a benefit while also making sure everyone makes above the poverty line.

Additionally, he could have a retroactive education compensation program. The company could offer up to X amount in education reimbursement weather you go under that education while working for them or before. A promissory note could be used to ensure that the employee must work for the company for X years or repay the money.

And you have good reason to believe that the people who got the raise were all janitors? And everyone who were already at that level deserved it?

You know what, I’m a software engineer, and I wouldn’t begrudge a janitor who got paid close to what I get paid. The janitor is doing a job I really don’t want to do, but is necessary. It took years of education to get where I am. But that janitor will have years of touching stuff I don’t want to.

No matter how much I think I contribute to the company’s core business compared to the janitor, I can tell you nobody would like to turn up to contribute to the core business if the toilets weren’t cleaned after just one day.

It’s sickening that it’s not enough that you earn what you do and get to do something you enjoy; you also have to be able to look down upon others to get a sense of self.

The other guy brought up janitor. But your point is a whole lot less persuasive if the position is a payment processor (which is what we are talking about here)…

This is what kills me. You and some of the others here – I bet you are the first to scream about income equality for women (or insert your preferred repressed group here). That is based on a relative comparison of income. But you guys keep saying that income is not relative…? And with such contempt for the concept of fairness…

How can you embrace the concept of fairness so easily in some scenarios and dismiss it out of hand in others?

Do you not see the problem with this? You are saying it is not fair to pay men more than women if they do the same job. At the very same time you are saying it is fair to pay people who do different jobs and contribute more the same amount as others with less demanding jobs that contribute less…

The only rationale solution for this is for everyone regardless of position to receive exactly the same income… Do you really believe this would result in a functional economy? Really?

As someone who has worked as both a janitor and a software developer at various points in my life, I think anyone who thinks a janitor should earn less than a software developer lacks perspective. … And should probably try working as a janitor for a few months.

Having done both jobs, I much prefer software development and I do not at all begrudge a janitor making as much as I do as a developer. Heck, you could offer me a 25% raise and I wouldn’t go back to being a janitor. That is an unpleasant, often thankless job.

Financial compensation should not just be a reflection of education and/or niche skill. There should also be factors such as how desirable a job is and how hard a person works.

Having worked in a thankless labor intensive job myself, I could tell you that half of the morons belittling low end jobs have no idea the of the crap and crushing disrespect people at this end receive. I’ve met a moron telling me how a brick layer is an easy job when he has no idea of the skills involved in laying a structurally sound and straight/leveled wall. While I may be unfriendly to just anybody, I’ll never be that guy talking down anyone doing any job to make a honest living.

My work as a janitor was worth about what I was paid, minimum wage. It required no training or education, just the ability to show up on time and follow instructions. These skills, almost by definition, are worth minimum wage, as they are the minimum skilset required for all jobs.

My work as a software developer required extensive training and experience.

The thing is, your comment is based upon exactly ONE assumption: the “training time” to get those skills (ie, most often than not, university) was hell.

Yeah, not very convincing.

If you’re part of the minority who had to do crummy jobs while taking night classes, that may fly. Otherwise, I do remember my student years, and there is no way you’ll convince me or anyone who was in university that this was painful (overnight cramming and all such included).

If you’re part of the minority who had to do crummy jobs while taking night classes, that may fly. Otherwise, I do remember my student years, and there is no way you’ll convince me or anyone who was in university that this was painful (overnight cramming and all such included).

Especially since in most countries, including mine, *society* bears the brunt of the cost of higher education. A year in university in The Netherlands costs a student around â‚¬1750, which is a fraction of the *actual* yearly cost – the rest is paid by the government through tax money.

So, in other words, those years you spent at university, relaxing (for most studies, save hardcore stuff like medicine)? Yeah, paid for by those janitors we’ve been talking about, because they were already making long work weeks while you were fucking your fellow students and getting drunk 4 nights a week.

So, in other words, those years you spent at university, relaxing (for most studies, save hardcore stuff like medicine)? Yeah, paid for by those janitors we’ve been talking about, because they were already making long work weeks while you were f–king your fellow students and getting drunk 4 nights a week.

Getting drunk 4 nights a week. That says it all really. It’s so extremely obvious that you have no clue what you’re talking about. There’s a damn good reason why everyone and their dog ridicules the ‘alpha’ studies in the Netherlands (for foreigners: alpha is languages, philosophy and other non-technical occupational therapies). What they call a ‘tough schedule’ in Leiden is considered holidays in Delft.

I’ve done a master degree in civil engineering/software engineering. I’ve also done a Swedish bachelor (minus boring poetry) for fun by skipping engineering classes and studying those at home. A walk in the park is tougher than language studies. With 10 minutes of preparation per class including ‘homework’ you could get a proper grade without any further effort. You can’t even remotely compare that to the number of allnighters of calculations, logics and programming we had to do just to get the tasks done. Finishing projects during exams was no exception.

One final economical concept you probably haven’t heard about during your English study: opportunity costs. 5-6 years of studying (yeah I know, for languages it’s just 4), means that you live 5-6 years without income. At 30k per year, that’s a lot of missed money during a period where you’ll incur a lot of costs (house, family, kids…)

PS. I know there are idiots who do drink 4 nights week. They either fail or finish it in 7-10 years after they grow up and start working. Most students who succeed are not idiots.

Well, I’ve done a master degree in computer science (is that hard enough for you?). As I said, allnighters included (which actually happened because I played around too much), I would in no way say those years were a negative experience. As a matter of fact, I even went back to being a student to get an ESL master. With that last, I call BS on your comment about non-science degrees. It may be somewhat easier to get a passing grade, but for it to be any worth, you have to work as hard as for sciences.

As for the “loss of income”, either we are in the current system where there is no loss of income (far from it) because of the time spent in university, or we are in a system where that time only means access to more interesting jobs than that of a janitor (but without a significant difference of incomes). In either systems, I fail to see how being able to spend a few years as a student isn’t beneficial, both at that time and afterwards.

the way I see it, the only downside, at some point in the past, was the delay before being able to start your family. Well, except if you really want to have kids early, I fail to see how that is relevant nowadays1.

The bottom line is : would you want to do the job of a janitor? Is it useful in general and to you, personally? If you answer no and yes (and I very much doubt that your answers would be otherwise), how can you even think that a janitor earning as much as those who directly benefit from his job is in any way unjustified?

Well, I’ve done a master degree in computer science (is that hard enough for you?). As I said, allnighters included (which actually happened because I played around too much), I would in no way say those years were a negative experience. As a matter of fact, I even went back to being a student to get an ESL master. [/q] I never said it’s a negative experience. Just that people don’t have the time for getting drunk that often. I really enjoyed my student time but that wasn’t the point, I said it’s hard work, they’re not mutually exclusive.

As a matter of fact, I even went back to being a student to get an ESL master. With that last, I call BS on your comment about non-science degrees.

Well, I really didn’t have to work a lot to get a score above the median (I did most of my preparations on a 20 min bus ride). The weekly schedules had enormous free time gaps, excellent for group presentations and such, evenings were free, nobody had to do all-nighters. At worst, you had to read some books. So yeah, getting drunk 4 times a week was an option there.

Now don’t get me wrong, someone who excels in languages (or whatever their job is) gets my utmost respect. I mean that. They can do things I can’t and never will be able to do. However that doesn’t take away that it’s just too easy to get a language degree. I think they should be a lot harsher when grading. With the amount of work I put in those courses, I should have failed them. I want that degree to mean something so you can respect someone for getting it.

Like you say, for it to be of any worth, you have to work as hard as for sciences but if you can’t judge that from the degree itself then what is the point of the degree? Many people consider it something you can take when you don’t really know what else to do and they can get away with it. I think that’s wrong. It turns the whole thing into a joke.

[q]The bottom line is : would you want to do the job of a janitor? Is it useful in general and to you, personally? If you answer no and yes (and I very much doubt that your answers would be otherwise), how can you even think that a janitor earning as much as those who directly benefit from his job is in any way unjustified?

For 70k/year I might do it. At least for a while. You get a lot of freedom after work in return. I’ve done a similar job before. In a mental way it’s very relaxing.

If it was just n=1, then I’d consider myself exceptionally gifted. I’m not, especially not in the language domain (I nearly failed French in high school, there’s that). Worthless language degrees are a common occurrence, and are in fact a problem for unemployment, both in Belgium and in the Netherlands. I’m fairly sure the same goes for other countries.

People who have a language degree often take extra, more useful courses to give them an edge over their fellow students. In fact, every single one I talked to (n>1) did that. One friend even switched to IT and surprised me by taking programming courses. She’s doing very fine now in a company that has nothing to do with languages at all (other than the Belgian Dutch/French joke where eventually everyone speaks English.)

The whole thing is particularly funny because during my first class people were asked why they chose to do languages. Most gave an uninspiring “generally interested” but didn’t seem very motivated to actually gain knowledge and understand a language, this also became clear during lectures. It was more of a “there are no mathematics here” thing, which some even explicitly mentioned.

That doesn’t make them bad or stupid people. They were very caring and I had some great fun there. I just find the lack of motivation a bit sad. Brings back nice memories though.

Anyway, enough of my stories in this thread. I apologise for my harsh reaction before. I didn’t want to demean you, but I didn’t want years of hard studies to be compared to one long drinking party either. I also believe you when you say you don’t care what your colleagues earn. Although I do think it will subconsciously affect the way you view your own job. We probably disagree on that, but I’m not going slap you with a glove to duel it out. Have a nice day!

What always bothers me about this attitude is that yes, it may take lots of education to become an engineer. Yes, you put a lot of effort in… but tell me how many engineers are willing to keep a workplace clean? How many of us ungrateful bastards are willing to get down there and unclog a toilet? Do you have any idea of the shit they have to do, and how little respect they get from we so-called smart people? Spend a week doing their job. You’ll come away with a new respect, I think. They may not require as much education as you, but they are just as essential to a thriving workplace as any engineer or accountant because, guess what, without them keeping the place fit to work in, you will be looking for a new goddamn job right quick.

They may not require as much education as you, but they are just as essential to a thriving workplace as any engineer or accountant because, guess what, without them keeping the place fit to work in, you will be looking for a new goddamn job right quick.

I dunno, man. I’ve been a janitor before, and although it wasn’t pleasant, if I could make 70k a year doing it, I probably would. At the very least, it would be a lot less stressful than the job I currently have, and I’d never be on call during the weekend …

At the very least, it would be a lot less stressful than the job I currently have, and I’d never be on call during the weekend …

You sure about that? You do know there are plenty of workplaces open on the weekends. And besides, if it means being treated like crap by people with an attitude like yours, you might be more hesitant to do it even for 90k.

You sure about that? You do know there are plenty of workplaces open on the weekends. [/q]

True, but at least I wouldn’t be paged at 3am anymore every time some server in production implodes …

[q]And besides, if it means being treated like crap by people with an attitude like yours, you might be more hesitant to do it even for 90k.

For 90k? That’s almost twice what I’m making now. I could put up with some shitty attitudes Mainly because I already deal with account reps with shitty attitudes on an almost daily basis. Janitors aren’t the only ones subjected to this …

Well, guess what, a CEO is probably sound asleep or partying the night away at that time. Do you think he works harder than you or has more responsibilities than you?

I’ve yet to see a CEO loose his job, or better yet, go to jail for running a company to the ground. People loose their jobs or go to jail for far much less. I’ve worked with senior management and their types. They are the true definition that crap floats to the top.

You just aren’t valuing his skills just like other people aren’t valuing janitors.

I make a lot less than my CEO, but I see the difference as me paying him for his services.

Do you have the contacts and communication skills needed to call a customer to go play some golf and get a contract for 20k/person a month?

My work is only worth 20k a month because he sells it for that much. If I sold it myself it would be probably only half as much and I wouldn’t get paid at all when some project went down south, not necessarily because of my work.

If you quit the exploited proletariat mindset and embrace Capitalism, it becomes a lot easier to go talk with your boss and get a 1k/month rise.

You still get your $70000, except now your fellow men and women on the work floor also get it. Is your self-worth really derived from earning more than the people around you?

Yes. Relative compensation (in the same sort of position) is generally a measure of how much you contribute to the company. If you’ve been busting your ass for years to get up to 70k and some slacker gets a 30k raise overnight it devalues all the work you put in. Why should you give half a shit what happens to the company if they have no interest in rewarding effort?

But your effort HAS bene rewarded. You earn 70k. THAT’s the reward. How does someone else also earning 70k devalue your reward?

If it does – then it means that apparently, the reward is not the salary in and of itself, but how much higher it is than your coworker’s. It implies that you would rather earn 70k when your coworkers earn 50k, than earn 90k when your coworker also earns 90k.

It’s simple. Your salary is a measure of how much the company values your contributions. So if the company has decided that the new guy fresh out of college should be paid the same as the top guys with twenty years experience – well, it’s a pretty clear message that your skills and experience aren’t especially valued.

I’m all for paying a fair salary at the low end, but if you’re going to give equal pay regardless of what each person contributes to a team, that’s a big de-motivator…

Well, it kind of is, because you’re suddenly raising the bottom level to that figure of $70k. And unless you’re also giving a sizable raise to the people already on or around $70k, then you’re giving a very clear message that spending several years of your life making yourself valuable to your employer is worth less than the CEO’s desire to make a grand gesture.

It’s a good gesture, don’t get me wrong, but it sounds like something done on a whim, instead of after discussing the idea with a few people to work out any concerns that might come up. A fine idea, but poorly executed…

But your effort HAS bene rewarded. You earn 70k. THAT’s the reward. How does someone else also earning 70k devalue your reward?

If it does – then it means that apparently, the reward is not the salary in and of itself, but how much higher it is than your coworker’s. It implies that you would rather earn 70k when your coworkers earn 50k, than earn 90k when your coworker also earns 90k.

As an analogy, let’s say you’re taking a college class and the final exam is going to be really difficult, so you study your ASS off for it, while most of the people in the class don’t give as much effort as you did. As a result, you get an A, and most of the other students get C’s and D’s. But then the teacher has pitty on the whole class and gives everyone an A. And you can’t see why this would rub people the wrong way? If you’re going to give everyone the same reward whether they work hard or not, then what motivation is there for anyone to do anything more than the bare minimum? You put me in a system where my basic needs are provided for whether I choose to work for them or not, and I’ll never work another day in my life, and live off the sweat of somebody else’s brow.

I’m not saying that the CEO doesn’t have a right to do what he did, but if he values the contributions of a janitor (who could probably be replaced in a week or two by someone with little to no skills in the marketplace) just as much as me, that is a person I wouldn’t want to work for. IMO, if he was going to raise everyone’s wages, he should’ve raised them in proportion to what everyone was already making. This is the same as raising the minimum wage to $15 an hour – burger flippers would be making more than some college graduates.

As an analogy, let’s say you’re taking a college class and the final exam is going to be really difficult, so you study your ASS off for it, while most of the people in the class don’t give as much effort as you did. As a result, you get an A, and most of the other students get C’s and D’s. But then the teacher has pitty on the whole class and gives everyone an A. And you can’t see why this would rub people the wrong way? [/q]

No, I really don’t. Of course, I understand there are people who measure their self-worth based upon how much better they perceive themselves to be than others, but no, I personally don’t give a shit. I’m not studying something really hard to get an A – I’m studying something really hard because I fucking want to.

This scenario has actually happened on numerous occasions in my actual life, at both high school and university, and in both cases I literally didn’t give a shit. In fact, I was happy for the people who got bumped up – why wouldn’t I be? Their success, whether they worked for it or not, does not, in any way, act as a detriment to my own sense of accomplishment.

I do things because I want to do them. I live not to work; I work to live. As long as I feel that my work is properly compensation, why should I give a fuck how much my colleague is getting?

If you’re going to give everyone the same reward whether they work hard or not, then what motivation is there for anyone to do anything more than the bare minimum?

This is not what is actually happening at this company. That being said, even if it were – are you implying that money is your only incentive?

If so, I pity you.

[q]You put me in a system where my basic needs are provided for whether I choose to work for them or not, and I’ll never work another day in my life, and live off the sweat of somebody else’s brow.

Except not really. Just look at any millionaire or billionaire who doesn’t need to work. For some strange reason, they all still work – and really, really hard, too – even though they don’t have to. Any study that has ever been done with basic income – Canada, United States, whatever – found that people still worked just as hard with a basic income as they did without it.

Reality has cought up with your spoonfed, capitalist dogma. People really actually like to work – they just don’t like working in crap jobs for crap pay in crap environments with crap, overpaid bosses. The moment people are no longer forced to work in such environments, a lot of really powerful and rich people will be scared as fuck – and you’re playing right into their hands.

I understand there are people who measure their self-worth based upon how much better they perceive themselves to be than others, but no, I personally don’t give a shit.

That’s only half of the equation. There are people at my company making much more than I do, but their contributions are also much more valuable, so that’s fair to me. What ISN’T fair to me is people all making the same amount of money as me, regardless of whether or not they’re putting in 1/10th the effort and/or bringing in 1/10th the revenue. If my company announced on Monday that every CSR rep would be making the same amount of money as those of us in engineering, I’d asked to be demoted to that job immediately. The CSR reps don’t have to put up with half the stress and bullshit that we do, nor are they ever on call on nights and weekends. (I know this because I worked my way from CSR to engineering.) And their pay scale reflects the amount of stress and bullshit they have to deal with.

And anyway, you apparently don’t care about others getting the same money or recognition as you regardless of whether they earned it or not, so what is it exactly that motivates you?

And what would those be, specifically, if not money or recognition? I’m really trying to understand what motivates a socialist to do more than they have to. Or more specifically, what would motivate a socialist to do a crappy job they didn’t have to? I mean, SOMEBODY still has to do them. If your toilet overflows and there are turds floating down your hallway, somebody has to clean that shit up and replace the carpeting. And unless you’re knowledgeable about carpeting and/or plumbing, you’d have to convince somebody to come do that for no compensation …

Well I’m no socialist, so I can’t answer for them, however I’ll offer you my perspective. What would motivate me to do a shitty job? Payment, of course. It’s not that I don’t want money, it’s just that I do not measure myself against anyone else. If I have the knowledge an you compensate me, I’ll get a job done because there’s a reward in it. Same thing, I would imagine, that motivates you. The only difference is you seem to derive your worth based on how you stand against others. My own worth is entirely my affair and whether you make 2 times my salary or a quarter of it is no skin off my back.

My own worth is entirely my affair and whether you make 2 times my salary or a quarter of it is no skin off my back.

Well, let’s say you and I work at the same company and on the same team. You show up an hour earlier than anyone else and work your ass off, producing much more output than anybody else on the team. Meanwhile, the rest of us are usually showing up 10 minutes late, and doing the bare minimum we have to do in order to get a paycheck. This has worked out so far, because you’re earning more money than the rest of us, according to your contributions.

But then the boss sends out an email one day and informs us that everybody on the team will now be making the same amount as you, and this wouldn’t bother you just a little? And even if it didn’t, would you still be motivated to keep doing so much more than the rest of us?

But then the boss sends out an email one day and informs us that everybody on the team will now be making the same amount as you, and this wouldn’t bother you just a little? [/q]

Assuming no one else is seeing their salary slashed (other than, perhaps, the higher-ups who willingly choose to do, like the CEO in this particular case), then no, this would not bother me one bit. Like I said: my sense of accomplishment is not defined by others, but only by myself.

[q] And even if it didn’t, would you still be motivated to keep doing so much more than the rest of us?

Of course – because I want to. I would only be working there and working that hard if I liked doing it. Otherwise, I would find a different job. Other people now making just as much as I do has ZERO impact on MY OWN enjoyment (and thus, my OWN willingness to work and work hard).

Of course – because I want to. I would only be working there and working that hard if I liked doing it. Otherwise, I would find a different job.

So in your world view, nobody should ever take a job and work hard at it, unless they like it? Guess you’re gonna have to get used to taking your own garbage to the dump, and then burying it yourself. And also managing your own sewage …

So in your world view, nobody should ever take a job and work hard at it, unless they like it? Guess you’re gonna have to get used to taking your own garbage to the dump, and then burying it yourself. And also managing your own sewage …

You might be surprised at what people like to do. I know several people that actually like what we call the @mindless@ or @dirty@ jobs, because they don’t often have to deal with people. Others like it because they can spend the day thinking about anything they want while they work. Still others just like making life better for everyone including themselves. If you’re really curious, get down off your high horse for a bit and spend some time around these people rather than your fellow engineers or intelectuals. What you find will, I think, surprise you.

If you’re really curious, get down off your high horse for a bit and spend some time around these people rather than your fellow engineers or intelectuals. What you find will, I think, surprise you.

Oh, I used to work shit jobs. I don’t recall a single one of my co-workers who liked it either. Not saying there aren’t any out there, but I wonder if there’d be enough of them willing to clean the shit out of porta-potties in the hot summer sun because they like to do it …

Because nobody in their right mind could possibly like driving a garbage truck? Or working the computers in a sewage treatment plant? Or being alone in a fancy office tower washing floors and windows?

You have a very strange outlook on life. Perhaps you should actually talk to and spend time with people doing these menial jobs you find beneath yourself. I think you’ll be quite surprised by their outlooks on life and work.

Because nobody in their right mind could possibly like driving a garbage truck? Or working the computers in a sewage treatment plant? Or being alone in a fancy office tower washing floors and windows?

I’m not saying NOBODY would like it, but if everyone who didn’t like doing these things quit, how many of them do you suppose would be left? And would there be enough of them left to do all the work in these areas that need to get done?

But then the boss sends out an email one day and informs us that everybody on the team will now be making the same amount as you, and this wouldn’t bother you just a little? And even if it didn’t, would you still be motivated to keep doing so much more than the rest of us?

You’re really not getting it. I don’t give a shit what my team mates make in comparison to me. And yes I would still put in the work, because I have something so old-fashioned as pride in my own work. Even if no one else cares, I’d care if I didn’t do a good job. Guess I don’t fit in with the modern age, but there you are.

I’m guessing you don’t enjoy your work at all? you don’t relish doing the best you can because its the right thing to do?

I guess a part of me is shocked that people don’t know philosophy, but then again, if your goal was never to do the right thing then it makes sense you didn’t retain anything of what you might have learned.

I’m guessing you don’t enjoy your work at all? you don’t relish doing the best you can because its the right thing to do?

I guess a part of me is shocked that people don’t know philosophy, but then again, if your goal was never to do the right thing then it makes sense you didn’t retain anything of what you might have learned.

(a). Take your salary and give it the vast majority to your employees who make less than 70k, but give very little (or nothing) to those who make more.

(b). Take a portion of your salary and give it to ALL your employees in a documented and fair distribution. Take the rest and seed a profit sharing program or other pay for performance program that would enhance their well being AND the company’s.

(a) is a grandiose gesture that gets lots of attention, stirs up lots of controversy, and more than likely will result in the company getting sued into oblivion by the “evil” brother… (b) actually accomplishes something.

Because one of the fundamental tenants of Kant’s philosophy is universalizability… Applying (a) universally would absolutely, without question, fail. Im pretty sure it will fail even in isolation like this, but universally applied it would absolutely destroy the economy.

The US is already in the top 10 countries as far as minimum wage goes, and the difference between 1 and 10 on that list is about $4.

Im not sure how you don’t see that increasing minimum wage from $7.25 to $28.80 would utterly decimate the economy, especially since you brought up Kant in the first place.

If it cannot be applied universally, or applying it universally results in a poor outcome, than it isn’t “right”.

[q]you don’t relish doing the best you can because its the right thing to do?

Hell no I do the best I can because when it’s time for a raise or promotion, I want to be one of the people considered. That is what drives me. If I were in a system where there was no chance to move up and/or everybody got paid the same, then I’m doing the bare minimum I have to in order to stay employed.

It’s cool if you want to go above and beyond ‘just because’. We all have different motivations in life …

Yup. We all do have different motivations. That at least we can agree on.

Although I know the right thing(tm) to do in most situations, I can’t assume people will do them. The internet in particular has disavowed me of such childish notions. People will do stupid, cruel, evil things, because humans.

Although I know the right thing(tm) to do in most situations, I can’t assume people will do them. The internet in particular has disavowed me of such childish notions. People will do stupid, cruel, evil things, because humans.

Well, if you’re an employer, the right thing(tm) to do would be to compensate the employees more who go above and beyond what is asked of them. If you’re not willing to do that, then you have to at least expect that your top employees are going to find someone who will …

My own needs, wants, and desires motivate me. That’s it. I work because I want to. Like I said – I work to live. I do not live to work.

Needs I buy – needs have an essentially fixed value. Its the wants and desires part that confuses me. If you would like to have a $50,000 watch but can’t afford it, isn’t that a want or desire? How about a Fiona Apple box set that is just out of reach financially? The only way to get those things is to be able to afford them, and if you can’t afford them the only way to be able to is to earn more income. So… clarifying question:

Would you accept a raise or promotion? It might be a bit more work on your part (even to the point where you enjoy it a bit less), but you are qualified and you would make significantly more money. Would you take it?

If you say yes than your “I work to live” statement is in fact bullshit. You do not work to live, you work (at least in part) for financial incentive. There is no other explanation for you being willing to sacrifice for more pay. You in fact do place relative value on your work, otherwise you would generously agree to just take on the expanded job role simply because you can, and let the money go to someone else who needed it more. Your wants or desires wouldn’t matter…

On the other hand, if you say no I simply don’t believe you. Because that is the definition of rich – you have everything you want. Except I have heard you say on a number of occasions you are in fact not rich, and that there are some things you would like that you can’t afford.

But lets say you are rich. Ethically shouldn’t you tell your employer to give someone else the money instead (like this CEO did)? You should probably sacrifice that watch, the Fiona Apple box set, and any other wants or desires you may have, because there are others who “need” money more than you. Maybe you should ask your employer for a pay cut…

Let me know when you have decided to cut your own earnings to the bare minimum to live (like this CEO did) and then you can sit on your mighty throne of ethics and look down with pity on all the folks who want to work where their contributions are justly rewarded…

The rest of us live in the real world. Money is an incentive to work harder, pay is relative to contribution, and yes your salary relative to your peers is important to your choice of employer. You and this CEO guy just live in a fantasy land.

This is not what is actually happening at this company. That being said, even if it were – are you implying that money is your only incentive?

If so, I pity you.

Yeah, I call BS on that smug remark. It’s being usually propagated by people who earn good. Not everyone does, and that doesn’t just depend on skill, experience or knowledge. I, personally, wouldn’t ever work with or for someone who thinks money is just the icing on the cake. It’s an important part of the cake, and it has to be the right quantity for a good result.

No, I really don’t. Of course, I understand there are people who measure their self-worth based upon how much better they perceive themselves to be than others, but no, I personally don’t give a shit. I’m not studying something really hard to get an A – I’m studying something really hard because I fucking want to. [/q] That isn’t the whole point. Maybe you study things that are just personally interesting to you, and that you would do that even if you had a billion dollars in your account, but then you are very much the exception that the rule. Many people study hard and work hard to make themselves more economically valuable and to be able to demand a larger salary. if that feedback mechanism goes, then you are left with an essentially communist type set up where everyone is expected to give according to ability and make the same amount.

Now, this CEO is perfectly within his rights to pay everyone who works for him the same amount, but he should also not be shocked or hurt if some of his best employees leave and some of his worst employees stay forever (because no one else is going to pay them that much).

This scenario has actually happened on numerous occasions in my actual life, at both high school and university, and in both cases I literally didn’t give a shit. In fact, I was happy for the people who got bumped up – why wouldn’t I be? Their success, whether they worked for it or not, does not, in any way, act as a detriment to my own sense of accomplishment.

Your not caring again makes you the exception. The whole system breaks down if it doesn’t matter how well someone does – every one gets an A. Then why bother giving grades in the first place. Why not just provide a certificate of attendance and not kid people that they did really well?

I do things because I want to do them. I live not to work; I work to live. As long as I feel that my work is properly compensation, why should I give a fuck how much my colleague is getting?

You don’t have to care what your colleague is getting. But other people care precisely because they only do what they do because they are good at it and they want to be rewarded for doing it. They are not doing it because it is the thing they enjoy the most.

[q]If you’re going to give everyone the same reward whether they work hard or not, then what motivation is there for anyone to do anything more than the bare minimum?

This is not what is actually happening at this company. That being said, even if it were – are you implying that money is your only incentive?

If so, I pity you. [/q]

No need for condescension. If money is someone’s sole motive, what is wrong with that? Are you making a moral judgement about people’s motives in employment. How many janitors would keep their job where it not for the money (which ordinarily isn’t very good)? Are their motives purer then, or less. or put the question another way, how many janitors do you think are going to be leaving Gravity to be janitors at an organisation that mostly does charity work and is unable to pay them $70,000?

[q]You put me in a system where my basic needs are provided for whether I choose to work for them or not, and I’ll never work another day in my life, and live off the sweat of somebody else’s brow.

Except not really. Just look at any millionaire or billionaire who doesn’t need to work. For some strange reason, they all still work – and really, really hard, too – even though they don’t have to. Any study that has ever been done with basic income – Canada, United States, whatever – found that people still worked just as hard with a basic income as they did without it.

Reality has cought up with your spoonfed, capitalist dogma. People really actually like to work – they just don’t like working in crap jobs for crap pay in crap environments with crap, overpaid bosses. The moment people are no longer forced to work in such environments, a lot of really powerful and rich people will be scared as fuck – and you’re playing right into their hands. [/q]

Why don’t you find a janitor who won the lottery and see if they continued turning up to work as a janitor?

Reality hasn’t caught up with any dogma. You only have a single example of a company that has attempted to introduce this, and it is only a couple of months in and they are already signs of trouble.

Look up the fallacy of composition – you should not infer from even a partial success in a single organisation that this could work for the whole economy. it could only work in a system where there was a lot of stick involved, and you do not want to live in such a country!

I do things because I want to do them. I live not to work; I work to live. As long as I feel that my work is properly compensation, why should I give a fuck how much my colleague is getting?

I can’t see how “proper compensation” could be conceived without being relative to something. I guess perhaps you’re comparing to the wider society. If we take an even broader view, and consider third world countries, then probably pretty much everyone in the the first world is overpaid. I think most people don’t take such a broad view, at least if involves people less well-off than themselves. Stream of consciousness here, I guess. I’m not sure you’re wrong, but I don’t think it’s how most people think.

I do things because I want to do them. I live not to work; I work to live. As long as I feel that my work is properly compensation, why should I give a f–k how much my colleague is getting?

If your colleague can get compensated equally for only 80% of the work, then I’m pretty sure you will (perhaps subconsciously) be motivated to start working a whole lot less so that you have that 20% of time/energy to spend on living. After all, as you correctly say: we work to live. If we can live more with less intensive work, the better.

If that is what the company wants, great! I just hope they can sustain it while allowing you to work at 80% productivity as well.

Also, I really believe you that you like your work, I like mine too and I’d still do more than the bare minimum, but I’m pretty sure that would be a whole lot less than what I currently do as I would invest my “development” energy/pleasure in other projects instead. The combination of energy/pleasure/time is a finite resource and despite loving my job, I would still rebalance it away from work if my job had less requirements for the same wage.

If your colleague can get compensated equally for only 80% of the work, then I’m pretty sure you will (perhaps subconsciously) be motivated to start working a whole lot less so that you have that 20% of time/energy to spend on living. After all, as you correctly say: we work to live. If we can live more with less intensive work, the better

…no. Just – no. Stop projecting your own feelings upon others. I would NOT work any slower because of that, because I work FOR MYSELF. I would not work any less because that would damage my own pride in my work.

That’s all nice and optimistic, but I’d like to see that happen in reality, especially as you get older and get a family.

You will most definitely produce less value if that’s allowed. Not necessarily by working slower or doing sloppy work, just by doing less overtime, taking on less work, and not working as intense during crunch time. If you would still endure all that stress out of pride, then you should really reconsider your statement that you don’t live to work. Instead of money, you just get paid in pride at the cost of time that could have been spent elsewhere.

Either that, or you’re one of the lucky few and have a very relaxing job that makes a lot of money, in which case it’s easy to take the preaching high ground of course.

Ah jeez, judging from your reaction time, you haven’t even read what I wrote. Sure, keep thinking I said that you’ll start doing shitty work from that point on.

Also I love that you think you’re above human nature. I wrote ‘subconsciously’ and ‘as you get older’ for a reason. To me you really sound like a dreamy idealist talking from either a very lucky or a very shielded environment.

Actually, I do take this back somewhat. This is assuming that more work equals more productive work, which isn’t necessarily the case. A well rested worker can be (and usually is) more productive than an overworked one. Everything I wrote is assuming that everyone is already ‘well rested’.

Interesting analogy. When I was in school I had to work ten times harder in my engineering classes for the same grade I’d get in some liberal arts classes that comprised the majority of other people’s majors. In your analogy that was totally unfair since my 3.0 GPA and their 3.0 GPA looked exactly the same on paper. Using single metrics to determine worth is shortsighted.

But your effort HAS bene rewarded. You earn 70k. THAT’s the reward. How does someone else also earning 70k devalue your reward?

If it does – then it means that apparently, the reward is not the salary in and of itself, but how much higher it is than your coworker’s. [/q]

How it is not completely self evident to you that this is in fact how capitalism works perplexes me. Of course the reward is not the salary itself – it is absolutely based on how much higher than your coworker’s it is…

This is an isolated case of course, so it won’t have much effect outside of this company. But think what would happen if everyone were to suddenly decide that the floor for annual wages was 70k in the US (which would represent a rise in minimum wage of roughly 460%).

Prices for everything would rise, on average, by a significant percentage of that amount. There were be variations here than there depending on how labor heavy the industry was, but on average it would track the jump in wages as a first approximation. It has to. Your dramatically changing a very important value in a feedback loop…

This is why the feds don’t increase minimum wage in big jumps – you make it small enough to get lost in the margin between the wage floor and median income and it is mostly invisible. It just becomes part of the cost of living, and everyone gets their fair share in time. But do it all at once (or in huge steps like this) and it is no longer invisible… People notice. And they get pissed.

So you made 80k before the jump. Is your 80k still worth 80k??? Everyone else jumping to 70k devalues your salary, because prices went up on everything. Not in fuzzy conceptual terms, in actual terms. 80k is simply not worth what it was yesterday. Your salary is devalued. In fact, everyone who made significantly more than minimum wage would have their wages devalued. It tapers off as you go up of course, but you can’t just give the bottom a raise – it has to “bubble up” at least to some degree or the outcome would be catastrophic.

And why would you take on all the hard work and responsibility involved with a high wage job when now you could go be a file clerk or a bank teller or a pizza delivery guy and make almost the same amount of money (and maybe privatize your passions instead of leasing them to an employer)? I’m a programmer. If tomorrow I could make 80% of my current salary delivering pizza I would be out of there in a heartbeat…

The mistake this guy made was not in giving up his 7 digit salary for his employees benefit – that was noble. The mistake was trying to set a wage floor. What he should have done was calculate a gentle downward sliding scale for a fixed percentage increase, give it to everyone, and setup profit sharing for the remainder. By doing it that way he could have created the same positive effect for his employees without pissing off the higher earners, and it would have sounded more rationale to the customers that were scared off by the grandiose political stunt (and lets be real – this was a stunt).

Taking a stand against exuberant CEO pay is a good thing, doing it stupidly is not. This stunt may (probably?) will fail. His brother probably has a winning case for his lawsuit from what I see. This may in fact end up destroying the company. Does that do his workers any good in the long run?

[q]It implies that you would rather earn 70k when your coworkers earn 50k, than earn 90k when your coworker also earns 90k.

Maybe not in isolation, but if that were applied to everyone in the economy, 70k would in fact be more money than 90k in that scenario…

And why would you take on all the hard work and responsibility involved with a high wage job when now you could go be a file clerk or a bank teller or a pizza delivery guy and make almost the same amount of money (and maybe privatize your passions instead of leasing them to an employer)? I’m a programmer. If tomorrow I could make 80% of my current salary delivering pizza I would be out of there in a heartbeat…

In Australia new graduates only earn 10-20% above the minimum wage. Yet our universities are bursting at the seams and pizza stores and banks have trouble getting staff.

In fact the some of the lowest paid professions in Australia (veterinarians, pharmacists and physiotherapists) have extremely high university entrance scores.

The reality is that there is much more to life than just a pay cheque.

If tomorrow I could make 80% of my current salary delivering pizza I would be out of there in a heartbeat.

And that’s the point of view that I don’t understand, at least yet.

Because delivering pizza would be vastly easier. It would put less strain on my family life. I could stop bringing my work home and just forget about work when I was off. I could literally turn my brain off for 8 hours a day and just deliver pizza… I could be selfish and just worry about me.

You know how much quality programming that would let me get done

Im not joking btw, I would totally do it. There are lots of projects Id love to work on for my own enjoyment that I simply don’t have the energy or mental capacity to work on with my current job… I actually have to put a fair amount of time, effort, education, and training towards helping the company succeed – I can’t just worry about me. That is why I get paid well for it, because I am willing to align my goals around those of the companies – it is an equitable compromise.

Here is the rub. Others on this board actually think that altruism will lead to some nirvana where all that and more is actually possible, if only everyone were as selfless and compassionate as this CEO…

I think they are a bunch of starry-eyed idiots with no concept of how economies actual work. Just my opinion of course.

How it is not completely self evident to you that this is in fact how capitalism works perplexes me. Of course the reward is not the salary itself – it is absolutely based on how much higher than your coworker’s it is…

This is an isolated case of course, so it won’t have much effect outside of this company. But think what would happen if everyone were to suddenly decide that the floor for annual wages was 70k in the US (which would represent a rise in minimum wage of roughly 460%).

Prices for everything would rise, on average, by a significant percentage of that amount. There were be variations here than there depending on how labor heavy the industry was, but on average it would track the jump in wages as a first approximation. It has to. Your dramatically changing a very important value in a feedback loop…

Except this ISN’T how capitalism works. Prices would rise if the SUPPLY of money increased not wages. Wages would have an indirect effect on prices if you couldn’t make a profit with the newly increased wages or if you were not increasing your profit in a publicly traded company. Then the company might feel the need to raise prices to compensate. The only other way prices would increase because of increased wages is if demand was increased to a point that shorted the supply.

Also this is irrelevant to ONE company making this change which will have zero effect on prices in general.

Except this ISN’T how capitalism works. Prices would rise if the SUPPLY of money increased not wages.

I have no idea why I would have to bother explaining this, but obviously money supply is not the only variable affecting pricing…

I’m not even going to address the rest… The only point was to illustrate how increasing the wage floor has consequences – it is a silly scenario because the fed would never be stupid enough to increase minimum wage that much (or really tweak any dial in the enonomy by that much).

It would be just as stupid as what this guy did. There are much better ways to do it that would have been just as effective and would not devalued anyone unfairly.

I have no idea why I would have to bother explaining this, but obviously money supply is not the only variable affecting pricing…

I’m not even going to address the rest… The only point was to illustrate how increasing the wage floor has consequences – it is a silly scenario because the fed would never be stupid enough to increase minimum wage that much (or really tweak any dial in the enonomy by that much).

It would be just as stupid as what this guy did. There are much better ways to do it that would have been just as effective and would not devalued anyone unfairly.

Except he is not increasing the wage floor, he is just paying HIS employees more at expense of his own. If his services or products remain priced the same, there’s no change in how it affects the rest. It’s a redistribution of income. He only moved money from one side of the table to the other without adding more to the table.

If this were to be applied globally by many companies where their CEO’s take part of their income and redistribute it across their employees, products and services would still be valued the same. The major change would be how people spend their excedent and how spending more affects the economy. Because sudenly, a whole lot of money would be put in the market, being usefull to the economy, when otherwise it would have been put in the bank or as investment.

I totally support this move as long as it is voluntary and doesn’t force a price change in products.

Except he is not increasing the wage floor, he is just paying HIS employees more at expense of his own. [/q]

No…. He is paying some of his employees more, at his own expense and the expense of some of his existing employees. He is perfectly within his rights to give up his own salary (that is even noble imo), but he has no right to impose it on others.

That is what no one is getting. This is not the CEO making a sacrifice – it could have been, but that isn’t what he did. What he did was impose a sacrifice on some of his employees for the sake of the others. Imposed sacrifices are not sacrifices, they are job requirements.

If his services or products remain priced the same, there’s no change in how it affects the rest. It’s a redistribution of income.

Yes. Exactly. It is a redistribution of income. The problem is it isn’t just his income he is redistributing. That is his prerogative, he runs the company, no argument. But expecting his higher value employees to happily go along with it was just ignorant. They don’t feel the redistribution was done fairly – so they left. Why is this so hard to understand?

It isn’t about absolute salary, it is about opportunity cost. This guy basically announced his company no longer offers opportunity, it offers a fixed living wage. If a living wage is what you want than fine, it sounds like a great job. On the other hand if you already make a living wage, why the hell would you work there? Other employers reward contribution with more pay…

[q]I totally support this move as long as it is voluntary and doesn’t force a price change in products.

Sure it is voluntary. Its also a shitty place to work for people with ambition above the arbitrary pay line he imposed. So they voluntarily left. I don’t get why anyone would expect them to do otherwise is all Im saying…

But your effort HAS bene rewarded. You earn 70k. THAT’s the reward. How does someone else also earning 70k devalue your reward?

Please… don’t pretend you wouldn’t be bothered by this.

You’re a translator right? Let’s assume you are very good and work hard at the job and earn $70k/year. Your colleague is a bit lazy, he makes lots of mistakes, and he wastes a bunch of time reading OSNews all day while you work. He used to make less than you (because the company realized you were better and paid you more), but now he makes the same $70k/year because that’s the new minimum. You can’t honestly say that would not annoy you.

But your effort HAS bene rewarded. You earn 70k. THAT’s the reward. How does someone else also earning 70k devalue your reward?

Please… don’t pretend you wouldn’t be bothered by this.

You’re a translator right? Let’s assume you are very good and work hard at the job and earn $70k/year. Your colleague is a bit lazy, he makes lots of mistakes, and he wastes a bunch of time reading OSNews all day while you work. He used to make less than you (because the company realized you were better and paid you more), but now he makes the same $70k/year because that’s the new minimum. You can’t honestly say that would not annoy you.

Thom would probably say it wouldn’t annoy him. Maybe he is one of those special few saints who actually wouldn’t be bothered that other people who aren’t as effective as he is would be paid the same.

Thom would probably say it wouldn’t annoy him. Maybe he is one of those special few saints who actually wouldn’t be bothered that other people who aren’t as effective as he is would be paid the same.

It really doesn’t. And there have been numerous people in this thread stating the same. My parents, my friends, my brothers – they all feel the same way, and I know them well, so I know they’re not just saying it (we’re Dutch, after all – we value honesty and directness/rudeness (pick one)).

Thom would probably say it wouldn’t annoy him. Maybe he is one of those special few saints who actually wouldn’t be bothered that other people who aren’t as effective as he is would be paid the same.

It really doesn’t. And there have been numerous people in this thread stating the same. My parents, my friends, my brothers – they all feel the same way, and I know them well, so I know they’re not just saying it (we’re Dutch, after all – we value honesty and directness/rudeness (pick one)).

I don’t know why you find this so hard to believe.

I don’t necessarily find it difficult to believe that it doesn’t matter to you. I know there are people who are not so motivated by money. but the world works the way it does because many people are motivated by money. This is what ensures the more efficient allocation of resources. A world in which janitors were paid as much as CEOs is a world in which as much in resources would be spent to train someone to be a CEO as it would to train someone to be a janitor – which is essentially nothing in free western societies. Or it would be effectively a country where some centralised agency would dictate how much was to be spent training potential CEOs (and scientists and any other highly skilled profession). Why would anyone saddle themselves with a ridiculous amount of debt (and the years of training it requires) to take on a profession that pays the same as a janitor?

Except that it doesn’t. It worked somewhat well for a while, but we’re currently seeing the system breaking apart at the seams. Poor people are getting poorer, rich people are getting even richer, and the middle class is being destroyed – and let’s not even get started about the effects on the environment. Coupled with the influx if automation and robotisation removing entire professions fro existence, and we’re facing a total collapse of our current system.

Either you can cover your eyes and ears and ignore the current realities, or try to move beyond what you were taught.

[q]Why would anyone saddle themselves with a ridiculous amount of debt (and the years of training it requires) to take on a profession that pays the same as a janitor?

That’s only because the system in the US is broken. I’ve enjoyed some of the best education in the world, and I have little to no debt (the only student debt I have is because I *chose* to take on said debt while I was a student; I didn’t really need it). The same applies to all my friends.

Just because the US system is broken, doesn’t mean everyone else’s is, too.

Thom, your view on the world is often so dark. I see the opposite what you see. We see way more rough things in the news in the past but this is a part of our changing world. We see racial tension frequently, sometimes horrible things, but this fight is needed to go to the next point, like it was needed in the 60s.

Yes, people are getting poorer. But can’t you see that they are stepping up and try to fight for their right? They want wage raises, they want better education, they want respect. Wasn’t this part of the agenda 50 years ago?

It is amazing how many countries improved upon LGBT rights in the last 10 years. It is amazing how much crime decreased in the US since the 80s. It is amazing that the whole world stans up for a dead lion. It is amazing how much life quality improved in the far east from 50 years before. I am sure that there is great prospect in front of Africa too.

There are a lot of rough things in life, but we must not forget about all the achievements. The future is full of challenges, and dark moments, but also successes.

Btw, I hope this whole automation thing will bring us at last the 4 day work week, everything is going to be much better then.

It really doesn’t. And there have been numerous people in this thread stating the same. My parents, my friends, my brothers – they all feel the same way, and I know them well, so I know they’re not just saying it (we’re Dutch, after all – we value honesty and directness/rudeness (pick one)).

I don’t know why you find this so hard to believe.

Because a sense of fairness is an innate human feeling. I still don’t believe it wouldn’t affect you if it actually happened in your job.

Yes, but your sense of fairness is not my sense of fairness, and my sense of fairness is not Elvis Presley’s sense of fairness. Fairness is relative. How something this basic eludes you is beyond me. You seem to think your specific sense of “fairness” is some sort of universal truth that you feel very strongly MUST also apply to me… Because reasons.

If I am happy with my salary, then that’s it. Other people’s salary has no influence on that. You can choose not to believe me all you want, but that won’t change a thing about how I feel about it – much like other people’s salaries.

some slacker gets a 30k raise overnight it devalues all the work you put in.

There we go again. If a person earns less, they must be a slacker. Because if a person earns more, they’re not slackers. A person earning 70k empirically always does twice the work of someone who does 35k.

some slacker gets a 30k raise overnight it devalues all the work you put in.

There we go again. If a person earns less, they must be a slacker. Because if a person earns more, they’re not slackers. A person earning 70k empirically always does twice the work of someone who does 35k.

And more often than not, someone’s compensation correlates in a higher degree to bargaining prowess and an ability to “sell themselves”, than to actual effort and worth to the company.

And somehow, this CEO’s action magically only affects people in exactly the same roles and not, say, people who do different roles that other people, for one reason or another, just wants to look down on?

some slacker gets a 30k raise overnight it devalues all the work you put in.

There we go again. If a person earns less, they must be a slacker. Because if a person earns more, they’re not slackers. A person earning 70k empirically always does twice the work of someone who does 35k.

Obviously not always, but in general yes. It’s generally a free market, and the person making 70k provides twice the VALUE of the person making 35k. If you are earning 35k and working very hard to do so, then you need to figure out how to become more EFFECTIVE and provide more VALUE to earn more.

Or you could complain about how unfair the world is and see how far that gets you.

I don’t understand why you need to go into personal attacks, you argue very well most of the time. However I do think that you are too radical.

Why can’t a Kardashian value more than a GP? Hack, even you talk about them, and with that they do their job very well. And it feels like you put things really black and white. Those bankers, as an example,provide a lot of value in their life. They screw up time-to-time, they do bad things too, and it hurts when they do. But you completely ignore the good side of their work.

And if a doctor does not find a tumour somewhere down in Luisiana, you do not really care, but you care about the Kardashians, and you care about your pension or investestments which are in the hand of those evil bankers.

I don’t understand why you need to go into personal attacks, you argue very well most of the time. [/q]

I didn’t go into personal attacks. I made the general statement that anyone who believes free markets show real value is an idiot. I gave a definition of a set, and it is not an attack should some people fall into that set.

Why can’t a Kardashian value more than a GP? Hack, even you talk about them, and with that they do their job very well.

No. I only mention their name because it comes up online every once in a while.

And it feels like you put things really black and white. Those bankers, as an example,provide a lot of value in their life. They screw up time-to-time, they do bad things too, and it hurts when they do. But you completely ignore the good side of their work.

The recession they plunged the world into far outweighs the minimal work they do.

Some things are so extreme they’re almost good as black and white. For people to be up in arms about people with jobs they look down on getting paid as much as they do but completely okay with people who are empirically useless compared to them has no grey area. It is a stupid point of view with no possible rational excuse.

And if a doctor does not find a tumour somewhere down in Luisiana, you do not really care,

I do actually. I care about that quite a lot.

but you care about the Kardashians,

I don’t know who they are. I just know the name.

[q]and you care about your pension or investestments which are in the hand of those evil bankers.

Yes, because they are overpaid to ruin everyone else’s life and still run to the government for help and don’t accept personal responsibility.

Why can’t a Kardashian value more than a GP? Hack, even you talk about them, and with that they do their job very well.

No. I only mention their name because it comes up online every once in a while.

[/q]

But this is the point, you see, their brand is their value and you chose their brand over thousand of hours: they worked for their money.

[q]And it feels like you put things really black and white. Those bankers, as an example,provide a lot of value in their life. They screw up time-to-time, they do bad things too, and it hurts when they do. But you completely ignore the good side of their work.

The recession they plunged the world into far outweighs the minimal work they do.

[/q]

What is the minimal work they do? The last time I checked the economy still works. Yeah, there were a lot of investments that disappeared at the last recession, but most of the economy remained intact. Most savings are still there, most loans and the the different financial products still exist.

Does your empoloyer exist without loans and savings? Are all your savings in precious metals? If that’s the case, yes, I agree that they do not do any work.

And I am sure that avoiding an employer of 50.000 to not to go bankrupt is little work either. And managing hundreds of billions of assets is little work either, maybe….

Some things are so extreme they’re almost good as black and white. For people to be up in arms about people with jobs they look down on getting paid as much as they do but completely okay with people who are empirically useless compared to them has no grey area. It is a stupid point of view with no possible rational excuse.

So a good laugh has no empirical value in comparison to good health? And didn’t the Kardashian already provide us good use as an example? For Thom they even provided monetary gains. And is Thom useless too?

I don’t like the Kardashians but they are good entertainers, they reach millions of people. In the past people had clowns, now they have this. In past they entertained a few dozen, now millions. Maybe it is not high culture, but I am no god to tell to other people how to feel good about themselves. I was born in a country, where if you wanted to have a band, you needed to have a license from the government. If you wanted to publish a newspaper you needed a license again. Even for a computer magazine it was not obvious to get this(this is actually a quite interesting story, they got license for books instead).

[q]And if a doctor does not find a tumour somewhere down in Luisiana, you do not really care,

I do actually. I care about that quite a lot.

[/q]

You cannot care about things you don’t know about. You can care about the published statistics of general screw ups by doctors.

Yet if an individual CEO screws up, you can bet that hundreds or thousands of people will have really great concerns about that.

[q]but you care about the Kardashians,

I don’t know who they are. I just know the name.

[/q] Yes, but you are not their core audience, yet you despite them and increase their brand recognition by quoting their name on a totally irrelevant website.

[q]and you care about your pension or investments which are in the hand of those evil bankers.

Yes, because they are overpaid to ruin everyone else’s life and still run to the government for help and don’t accept personal responsibility.

Yes, because people do not need to carry any responsibility for their deeds nor the government, I assume. It is just those evil banks whom forced people to buy houses and cars, it is not that the regulations were loose and that people enjoyed spending, and that banks helped in with their own profit-hungry mentality.

PS.: Actually what we do is a classic strawman… The amount the Kardashians earn is totally irrelevant to this topic.

It’s generally a free market, and the person making 70k provides twice the VALUE of the person making 35k. If you are earning 35k and working very hard to do so, then you need to figure out how to become more EFFECTIVE and provide more VALUE to earn more.

Or you could complain about how unfair the world is and see how far that gets you.

A market that is free in one direction only. What about the ones who were offered top positions because of their highly-expensive education titles that they were able to afford only because of their family wealth? In such a case you’re probably not giving the best recognition to those who bring the best value, but only to those who bring the best bank account… Not saying that it’s anything unusual in our wonderful world, but please keep it in mind when you express yourself about people’s value in wage factoring terms… 😉

I bet you could safely predict politics based on responses to this story — a litmus test for that peculiar grain of American exceptionalism: the more money you have, the more you deserve it. Your God is better. Your house is bigger. Your truck is thirstier. Your gun is deadlier.

In America, by God, you’re not successful unless the next guy is poorer.

I wonder what you people think of the Kardashians. How many millions do they “earn” a year, and do you REALLY REALLY think they do 10 times the work of someone who earns 100k a year?

Why are you okay that your work is devalued by professional vacuous pieces of meat, but not okay when “devalued” by someone who is doing a job you find insulting to your ego?

I sort of understand your broader point. I don’t at all agree with it, but I do understand it. Your example is horrible btw (no one is “ok” with the Kardashians being wealthy, we just haven’t figured out how to do anything about it yet)…

That said, I don’t think the issue is amount of effort scaling with income… I don’t know what others think, but me personally? I don’t think work effort scales with pay – and I don’t think it should necessarily scale with pay. You income should be based on the value of your contribution to the enterprise – that may be work effort, but it could be a lot of other things too (applied education, tactical thinking, etc. etc.) It is also based on the scarcity of your talents – if virtually anyone can do your job then your income should be lower than someone who does a job very few people can do. I will admit that isn’t exactly the reality of things (far from it), but it is closer than the nebulous concept of income = work effort, because then the question is how do you measure work effort? All that matters in the end is how I measure work effort.

Where I think our views really diverge though is that I do believe that income is relative. It is not how much I make, it is how much I make relative to others who contribute differently. That is what establishes both forward career momentum and financial incentive. I admit it isn’t the only way such things can be established and measured, but it definitely a valid way of doing it.

In other words, I do not measure my self worth by how much more money I make than the other guy. My self worth is my own. But I do measure my perceived value to my employer based on how much more money I make than the other guy… In other words if someone who I think sacrifices far less than me, puts in less personal effort than me, cares less about the company’s success than me, and didn’t pursue an education like me makes as much as I do – then my employer doesn’t value me as much as I think they should.

I wonder what you people think of the Kardashians. How many millions do they “earn” a year, and do you REALLY REALLY think they do 10 times the work of someone who earns 100k a year?

They don’t do 10 times the work, but obviously they provide 10 times the value to the market. Whether or not you like what kinds of things the market values is completely immaterial.

Red herring. That was not what people were complaining about. People were complaining that all their years of education and training blah blah blah were being devalued because someone they viewed as less skilled and works less gets as much as they do.

Red herring. That was not what people were complaining about. People were complaining that all their years of education and training blah blah blah were being devalued because someone they viewed as less skilled and works less gets as much as they do.

Which is quite clearly true. Obviously if someone significantly less skilled than you is compensated equally then you are being devalued in comparison.

Red herring. That was not what people were complaining about. People were complaining that all their years of education and training blah blah blah were being devalued because someone they viewed as less skilled and works less gets as much as they do.

Which is quite clearly true. Obviously if someone significantly less skilled than you is compensated equally then you are being devalued in comparison.

And how are you measuring this skill? And why should people accept your scale as to what is skillful or not? Who made you boss of what is skillful?

From the article, some of those people were paid less but couldn’t pay their rent AND their EDUCATION loans. They also had educations that they had to pay for but are unable to. What gives you a right to look down at someone as less skillful merely because they took a different degree than you? What makes it okay for you to do that to others but others aren’t allowed to do to you?

Two of Mr. Priceâ€™s most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises.

I would feel exactly the same way. Nothing strange about this. The fact that I’m still earning 70K is not the point. The point is that of fairness. Only a socialist would even consider this a good idea in terms of motivation for the people who does the best work.

Only a socialist would even consider this a good idea in terms of motivation for the people who does the best work.

That’s funny, because a CEO using his own money to raise the wages of his own employees in a way that he considers best for his own company, is probably the most capitalist, non-socialist thing he could’ve possibly done.

… A CEO using his own money to raise the wages of his own employees in a way that he considers best for his own company, is probably the most capitalist, non-socialist thing he could’ve possibly done.

You’re not wrong. Especially if he owns the company outright. Henry Ford once said something like, “You should make the best product you can, for the cheapest you can, while paying your workers as much as you can.”

Edit: So long as it actually is the best thing for his company of course. In this case that would depend on whether the benefits outweighed the loss of those two who left in a huff.

… A CEO using his own money to raise the wages of his own employees in a way that he considers best for his own company, is probably the most capitalist, non-socialist thing he could’ve possibly done.

You’re not wrong. Especially if he owns the company outright. Henry Ford once said something like, “You should make the best product you can, for the cheapest you can, while paying your workers as much as you can.”

Edit: So long as it actually is the best thing for his company of course. In this case that would depend on whether the benefits outweighed the loss of those two who left in a huff.

He’s not the sole owner of his company – he’s currently being taken to court by his brother, who originally owned half the company but became a minority shareholder when the company was restructured.

His pay cut is only temporary – once the company’s profits can cover the minimum salary, it will go back up to $1.1 million (or whatever it was).

That’s funny, because a CEO using his own money to raise the wages of his own employees in a way that he considers best for his own company, is probably the most capitalist, non-socialist thing he could’ve possibly done.

Agreed, Thom. We’re not often in agreement, but I think we can agree that the people most likely to fling names like “evil socialist” or “evil capitalist” around are the people who least understand the so-called insults they’re throwing. This is capitalism at its purist. Funny how these people love capitalism, right up until it means someone else gets rewarded along with them. Then suddenly it’s evil socialism. Idiots.

On a personal level, I understand his gesture. Perhaps he didn’t think it through, or perhaps the people leaving are just materialist morons. Regardless, it’s his right to do this, and time will tell what the consequences to his business will be.

That’s funny, because a CEO using his own money to raise the wages of his own employees in a way that he considers best for his own company, is probably the most capitalist, non-socialist thing he could’ve possibly done.

That is completely true, no argument. But a few of the higher wage earners and some of the clients reacting negatively is pretty much textbook capitalism too. I’m just assumed you guys on the other side of the pond understood our mentality better than that…

You seem to understand one aspect of capitalism (the power and flexibility held by the owner of the enterprise) and not the other (the power of the wage worker and the customer to go elsewhere when they perceive they are not being treated on fair terms).

In general, Americans don’t work for the wage we get, we work for the wage we want. You may think that is silly in your world view, and in reality it probably is to a point because most of us will never earn the wage we want, but none the less it is pretty much how we think.

In other words, if I worked there, I am never going to get the wage I want from this guy through hard work and contribution to the company, because he doesn’t pay people based on those qualities… Why on earth would I stay if someone else who pays logically would hire me?

I get the whole “work to live, don’t live to work thing” btw. But I do what I love, so I in fact do “live to work” (to a point) – I just lease my effort to someone else for money. So yeah, I care about how much they value me relatively, because I can just as easily lease my efforts to someone else…

Only a socialist would even consider this a good idea in terms of motivation for the people who does the best work.

That’s funny, because a CEO using his own money to raise the wages of his own employees in a way that he considers best for his own company, is probably the most capitalist, non-socialist thing he could’ve possibly done.

Don’t fault him. A lot of my fellow Americans have no idea what socialism is. They just “know” it’s evil.

Maybe I’m just too Dutch and too little American to understand this mindset, but I firmly believe this world would be a massively better place if more CEOs cut their own salaries to raise that of their employees.

I doubt the Dutch are much different from the Americans.

Most people, whether they should or not, do measure their worth relative to their fellows rather than in absolute terms. That’s the basis of trade and currency.

Most people, whether they should or not, do measure their worth relative to their fellows rather than in absolute terms. That’s the basis of trade and currency.

I don’t think it’s that direct. But money does serve as a measure of how much your employer values you as an employee – the more valuable you are, the more they pay you. Thus, a new person straight out of college and with no practical experience or history with the company gets a minimum rate – while someone with a lot of experience and relevant skills gets a lot more.

So by raising the minimum without also raising other salaries, you’re giving the unfortunate message to the people on $70k that they’re no more valued than the baby-faced new hire that was on just $40k a week earlier.

CEOs are overpaid. However you can level, or increase in proportion, so a highly trained individual and janitor both get 20% or whatever more. Instead, the highly trained, loyal expert gets nothing more, and the interchangable janitor hired last week gets his compensation tripled.

But there is the parable of the workers – those who worked an hour got the same as those who toiled a day in the hot sun.

I think it is universally assumed that if you put more effort to make things work you deserve a form or other of accolade. It happens even on personal relationships, as anyone with a partner would attest to be true.

Traditionally, on USA, it has been a raise on your income or position promotion. There are places where you are paid to do a job and it does not matter if you are better at it than, say, you coworker. There are places where the more you do, the more you get.

Irrespectively of the form of compensation, we all, or most of us, expect to be treated differently when we are somehow more effective on our tasks. It is imprinted on us since our first days at school.

And we have, all around world, estimations of effectiveness on doing tasks, like productivity, organization, reliability, safety, quality, teamwork skills and ingenuity as a problem solver.

So, unless your team is really fabulous and has no dirty corner for envy, prejudice or ressentiment, you better have a way in place to accommodate egos, even if it is just a cubicle close to the window.

What I find ridiculous these days is how much more a CEO is earning than even a senior officer. If I am not wrong, it started to accelerate on 80’s with Lee Iacocca “magic” compensation “schemes”. CEO’s and board members adored and adopted it left and right, what a surprise (Not!)! This end up being detrimental in the long run in the way the successive adaptations of “magic” compensation schemes evolved until its more frequent form that reward short gains we have today.

I find it a bit odd too that activities related to thinking is so much more valuated than some others that rely on other abilities, like concentration or precision, but it is certainly a whole much more matter for discussion.

Quitting because somebody suddenly makes almost as much as you, when they previously couldn’t afford food, rent, and student loans all at once, is selfish.

Wanting more is fine; wanting more than the next guy has isn’t.

Nothing wrong with wanting a fair days pay for a fair days work. If the next guy isn’t doing the same amount of work it is right you should want more.

If a unit of work is worth 10k compensation to the worker for their effort and one worker completes 10 units of work, but another completes 5 units of work to the same standard should they both receive 75k?

No that simply isn’t fair. This is why people will have quit, their work is no longer valued to the same extent it was. Why should they work more for the same compensation?

If the lower paid need a wage increase to cover basics such as food, rent etc. then it is right that the employer increases their pay. But pay should be increased across the board to maintain fairness in pay per work unit.

Thom states in another comment about working to live not living to work. If I have to work less for the same amount I can live more. So why would I want to stay in a job making me work more than the next guy for the same pay?

If the lower paid need a wage increase to cover basics such as food, rent etc. then it is right that the employer increases their pay. But pay should be increased across the board to maintain fairness in pay per work unit.

And that’s exactly what the mistake was here. Raising the minimum is a good thing, no question. But when people are expecting to be paid in proportion to the value of their contribution, raising *only* the minimum skews the scale, devaluing the contribution of people who now find themselves back at the bottom of the scale.

No that simply isn’t fair. This is why people will have quit, their work is no longer valued to the same extent it was. Why should they work more for the same compensation?

If you are expecting fairness from your employer (or whoever is in position of power in regards to you), you are condemned to be always unsatisfied with your position.

Tell me, do you consider your current remuneration “fair”?

Is that because of your perception or do you know the actual figures for other people in the company? (hint: usually the two do not agree)

It is better to give up on being treated fairly. Just see that what you are getting works for you. You will be happier and more satisfied, and others around you will be happier too.

Otherwise keep struggling, not that I really care….

Maybe the problem is using the emotionally loaded word “fair”. Fair means different things to different people.

I would prefer to use “equitable”. Equity would demand that those producing more, all other things equal, be paid more than those producing less.

Expanded further, equity means those producing something more valuable should be paid more than those producing something less valuable.

The mechanism by which one the value one’s work is decided is the market. Again, all other things equal, if two employers offered someone identical jobs, one would logically take the job that paid more, and that is the going rate.

Anything else requires a remarkable degree of coordination among employers, the like of which would be illegal in most countries and, in my opinion, immoral.

I have actually had many conversations about this with coworkers and they never end up pretty (I live in Western Washington State too which is surprising). The issue is that most people take offense when someone gets an automatic pay raise because they feel that they did nothing to deserve that, and yet themselves “working really hard” didn’t get anything. It doesn’t make any sense either because they don’t work that hard at all, they’re just meeting the bare minimum.

Profiling a bit, there’s a need in USA for other people to be below people so that they feel better about their bad economic position and don’t do anything to change that via the political process or union negotiations.

Behavioral economist, professor Dan Ariely wrote something about this exact phenomenon in his book ‘Predictably irrational’. I can’t remember how the twisted logic worked, but it is present in every one of us. No exceptions. Not even for you. You can claim you would be happy to work in a company where your low skill co-workers make as much money as you, but if that actually happened, you’d hate it.

Almost every workplace I have been in has lazy, low-skilled workers making more money than either myself or other, harder working employees. I didn’t hate it. As Thom pointed out in other threads, it doesn’t matter to some people (myself included) what other people make. I live comfortably, it’s not my concern what other employees earn.

Maybe I’m in a minority, but so long as I am living comfortably, I don’t worry much about my income and I concern myself even less with the income of others.

A lot of people in this thread seem to assume a higher degree of skill or harder work usually equates to higher pay. And that this leveling of the playing field where people are not paid on merit is wrong. But this exact scenario exists in virtually every business. Most companies have lazy, unskilled or unpleasant people in high earning positions. That is the norm. Chances are, unless your income is entirely commission based, you work in a place where effort and output is not correlating to wage.

That’s a whole lot of accusations & assumptions you’re making. How about backing any of it up with proof? AFAIC, you completely fail to understand the reasoning behind the decision and I would never compliment being so naive as “well put”.

Pretty simple to figure out what will happen. The butt-hurt employees who were on higher salaries will leave.

The lower paid workers will step up and fill their place. There will be a bit of pain in the medium, but overall the company will start doing better as the employees use their new wealth to take less time off work (by eating healthier and having lower stress over money), and work harder with more fervour for their jobs.

A happy worker is a productive worker, it’s been proven by countless studies. If you were a $30k-40k worker who got a $30k pay increase would you think of leaving?

Hell no. Heck if my boss gave me another $15k I’d be actively trying to change my life to make work as high priority as possible. I’d even be happy to work overtime.

Instead of the conversation being about the people who worked their way up to 70k/yr being pissy over this, how about we talk about something more important such as the years of stagnant wages for the vast majority of American workers. Or how about people who deserved raises and haven’t gotten them. Or how about the person who never saw their kids because they had to work 2+ jobs and are now able to actually spend time with them.

People crying about how much someone else is making is pathetic. Nobodies work history is being devalued. Nobody already making $70k was asked to give anything up. I have no sympathy for that “it’s all about me me me, and my feelings” mentality. The only problem here is ego and insecurity. Unless you’re financially irresponsible, $70k/yr is enough to have a nice steak dinner so quit acting butthurt and go have one.

On one hand you have people who are passionate about and who have dedicated their lives to their craft. Why others were out partying they were learning and perfecting their craft or working ridiculous hours on salary solving some of the most difficult problems others could not solve. Some people say a great programmer is worth 5 good ones but the same is true of other things as well as you get away from manual labor.

Some people have very high stress jobs. Imagine working on the systems for a huge organization where you are only permitted to work on it at night and you are allowed about 2 mistakes that impact the organization before you are fired but you must be back in the office during daylight hours for your normal job role and meetings and such.

When something breaks all the people below you can just say “I’m not sure what it is, too hard for me” until it gets to you. Sometimes they could handle these things with minimal effort but they don’t even commit that but you have nobody else to hand the problem off to. You can and will solve the problem because that is expected of you. Easy or hard the problem is yours to deal with and your hours sometimes exceed 80 hour weeks depending on what is going on.

You get free time and go do something with your family and as sure as the sun comes up your cell phone rings and there is something you have to solve at work.

Your fitness is starting to suffer as the job is taxing your personal health but you are too busy to eat anything other than fast food or soylent. The last time you actually made time to get to the gym between your split shifts your phone rang with some work emergency so you had to leave to go in earlier.

Meanwhile you have low effort employees who were “given a job” and told exactly how to perform it. Rather than having to learn on their own they get lots of training but still never figure out what to do because they just hand problems off to some other more senior employee. After 12 months they will say “where is my promotion for being here for a year?” where others have earned their promotions. When the work day is over they punch the clock and don’t look back.

And you don’t understand why the employee with the demanding and stressful job that consumes his time and energy has a problem that he gets paid the same as employee 2 whose salary is given to him out of charity? He is doing 5 times the work for almost the same pay and being held to a totally different standard and he should be OK with it?

That doesn’t get into other real world expenses that employee 1 has that employee 2 does not. Employee 1 has a small lab set up at his house to test and learn on. He buys books to read to help him get better that he probably pays out of pocket for. Instead of doing work around the house in his free time he has to subcontract it out because his job is too consuming to take on other projects. Instead of cooking inexpensive meals his options are take out. Even his child care expenses are higher and instead of his wife having her own professional career she must work part time to allow her to handle things around the house so employee 1’s brutally demanding job can take precedence.

So yes, employee 1 DOES have a right to complain when people at the bottom tier of the company get paid as much as he does.

No, employee 1 does not have any right to complain about anyone elses wages/salary. It doesn’t matter how you try to justify it. As I stated in my other post, this is about nothing more than ego and insecurity. If employee 1 feels they go above and beyond, and he/she deserves to be paid more, then employee 1 should go work for a company that agrees with the way things have been done. A company that thinks their employees making a living wage is less important than the gap between those people and the executives. A company that only values profit margins. The type of company that has helped decimate the middle class and got us into the mess we’re in now.

But you know, employee 1s feelings are more important than the greater good. They’re more important than overall morale, and the impact low wages have on our economy and society as a whole.

I believe in rewarding hard work. What I don’t believe in is someone who has already been rewarded for it being a crybaby because they think someone undeserving got rewarded too. Things need to change for the greater good. If that means some people need to grow up and stop thinking their feelings are more important, good! The growing pains might hurt them now but it will all be okay in the end.

I’m working on Mission Critical systems for most of the major Telecom companies, Banks and energy Companies in my country. I’m working on equipment with the price in the EUR millions/per unit. I am passionate about my work and am well payed (about 7 times the average national income), even though I’m only 30 years old.

I have colleagues in other competing companies doing more or less the same thing, that are payed one 3rd of what I’m payed and two that are payed double of what I’m payed. It depends on when you change the employer, on your age, on your previous income, on the economy, and many other things. It doesn’t mean that anyone of us is a slacker or anything similar. We would never compromise the trust that our patrons have in our company.

We all work 200+ hours per month (including at night on special interventions), we all use only 50% of our vacation and we have no income jealousy. Income as a method of appreciation is very American and unappreciated over here (Romania, the 27th member of the EU since 2007).

And trust me, on real servers and clusters that cost in the millions, you will make more than 2 mistakes and not get fired. The complexity of such systems means that a lot of things will go differently from what you or Oracle or IBM or HP expected. You do have to make a root cause analysis at the end of the deal, but that’s another story. There is a clear distinction between incompetence/ignorance and unexpected behavior. If it’s the latter, having a competent team to back you up, competent engineers on the client side and competent engineers on the other side of the phone line (with the vendor) will save the day (or night). It’s not about how many mistakes you make, as everyone makes mistakes at one point or another. It’s about how you handle those scenarios. The quality difference between engineers is not visible when everything goes perfectly. Handling unexpected situations under pressure is a much better differentiator. Coming with non-conventional solutions when the conventional ones would take you outside the intervention window is highly appreciated.

Getting back to the issue at hand, there will always be employees that get a stiffy when they talk about money. Instead of appreciating that they get a raise (regardless of the amount of the raise), they keep comparing themselves to their colleagues salaries, which is counter-productive. Think about it this way: 90% of the population of the world that has the same job as an US or EU employee with the same responsibilities, makes a lot less money. Should they be jealous? Should they move to the US or EU for a larger salary (but still less than one of a native)? That would start an income race to the bottom. The best metric to see this situation is the ratio between the smallest salary in a given company and the largest one. It used to be 1:50 in the mid 20th century, it’s more like 1:500 now.

If there’s a company where someone works 5 times more than another one, maybe the one working less should not be there to begin with. In a normal company everyone has at least 6 productive hours per working day. You can’t be arrogant enough to think that you work 5 times more than any other colleague. Unless they only work 90 minutes per day, and I can’t imagine them getting a full-time salary. Even if that is the case, the problem is not the salary, it’s the efficiency in the company.

I don’t think that an employee has the right to complain about a colleagues house, car, family, sexual orientation or salary. Anyone using these metrics for comparison is an idiot. That is, unless you think that Donald Trump works 10000 times more than you. Or that his work/effort is 10000 times more valuable than yours.

Except not really. Just look at any millionaire or billionaire who doesn’t need to work. For some strange reason, they all still work – and really, really hard, too – even though they don’t have to. Any study that has ever been done with basic income – Canada, United States, whatever – found that people still worked just as hard with a basic income as they did without it.

Reality has cought up with your spoonfed, capitalist dogma. People really actually like to work – they just don’t like working in crap jobs for crap pay in crap environments with crap, overpaid bosses. The moment people are no longer forced to work in such environments, a lot of really powerful and rich people will be scared as f–k – and you’re playing right into their hands. [/q]

I couldn’t agree more with this or express its concepts better, so I’m just going to quote and subscribe it.

P.S. All this mantra “I earn more so I am more worth than you” is just poisonous, and just as ridiculous as its real-life implementation. I personally know about a lot more examples of this “rule” being infringed than respected, i.e. people that don’t get what they actually deserve are the vast majority… But you can rest assured, their boss’ wage is several orders of magnitude higher!

And more often than not, someone’s compensation correlates in a higher degree to bargaining prowess and an ability to “sell themselves”, than to actual effort and worth to the company.

Just look at how sad is the kind of advice that most HR people give when you’re looking for a new job. They always want you to be some sort of advertisement anchorman of yourself during your interview… You must absolutely find some sort of exxagerated, hypocritical enthusiasm to show off for the product to sell (AKA You). And no, your actual, proven, hard-earned skills and years of experience alone seem never enough…

[q]Imagine working on the systems for a huge organization where you are only permitted to work on it at night and you are allowed about 2 mistakes (…) He is doing 5 times the work for almost the same pay and being held to a totally different standard and he should be OK with it?

Well, I would say there’s a problem with the employer’s organizational skills or will here. The kind of workload you’re describing is more akin to ancient slavery, and the employee ought to be taken to court ASAP. And no, I’m no socialist – we’re in 2015, stop quoting the history of politics and get real, dammit!!

..because everyone has to start somewhere, and you have to have some sort of equitable reward system for people who accomplish more as they achieve in their careers.

The idea you just give someone something was stupid to begin with were my thoughts when I began reading the article.

Now, if he would have laid out some sort of plan for people to get to 70K a year, instead of just waking up one day and deciding to unilaterally raise it, he could have started something.

But the fall out from this is something I am hoping is educational to people why people are paid differently, why there are differences in pay, and why without work, human beings are just not happy creatures.

Work is not slavery it is critical to the happiness of the human being.

Everyone should be working at least 40 hours a week and we all have to start somewhere.

I started at $10 an hour when I was a youngster.

My biggest worry is the system I grew up in for ample opportunities to work, has been destroyed by globalists due to the fact China has all of the manufacturing now.

AND

Our Universities in the USA are crap, and no way worth the money people are paying. (30K for a BS in Comp Sci degree….seriously?) So you end up borrowing and can’t find a job and your in the hole, with your credit rating destroyed.

Whats more, it is a trap. The first thing I am required to do is check a persons credit rating before he can work for me. (I don’t make the requirement HR does. Lots of young people unfortunately have bad Student Loan debt and I can’t hire them.)

Ironically, every young kid I hire is a Daddy paid for school kid. Which is something I don’t agree with, but HR leaves me no choice.

Thank god I didn’t finish that route and bailed.

That leaves our young people with basically welfare mostly, or mischief.

I do not understand all this crying and whining. If someone makes more money than me or someone who used to make less than me suddenly start to get the same pay as I do why should I care? If I felt before that the pay I was getting was adequate for what I did then it’d still be the same; what others make or don’t make simply don’t affect that. I just don’t have this need to judge others based on what sort of pay they get nor do I have to compare myself to them based on pay just to feel superior.

But whatever, I’ve long ago learned that selfishness and egotism rule the world.

If someone makes more money than me or someone who used to make less than me suddenly start to get the same pay as I do why should I care? If I felt before that the pay I was getting was adequate for what I did then it’d still be the same; what others make or don’t make simply don’t affect that.

Well, two reasons:

1. It actually does devalue your wage. To expand on the school grades example: if all your fellow students receive an A regardless of how well they did on the test, then that A becomes a meaningless number and your diploma loses its value in the market place as it can no longer be used to estimate your value. The same happens with wages but on a larger and perhaps less noticeable scale.

2. You felt that your previous pay was adequate for what you did. How do you consider something “adequate”? You compare that to others in a similar position. After investing a lot of energy/time (usually at the cost of energy/time at home), you’ll feel satisfied when you get a wage raise because it’s a recognition that your work is valuable. When the next guy with the same job gets his raise, not because of his effort, but because of a marketing stunt, then this recognition of your hard work loses its meaning. At that point you’ll no longer feel your pay is adequate for the energy and time you spent on your job. This can result in either (a) demanding to increase your wage, or (b) doing less work for the same pay (such as your colleague).

1. It actually does devalue your wage. To expand on the school grades example: if all your fellow students receive an A regardless of how well they did on the test, then that A becomes a meaningless number and your diploma loses its value in the market place as it can no longer be used to estimate your value. The same happens with wages but on a larger and perhaps less noticeable scale. [/q]

Illogical argument. Grades are there to measure your skill and how well you’ve done, wages aren’t. Wages are, by very definition, payment for work. That’s it, nothing else.

[q]2. You felt that your previous pay was adequate for what you did. How do you consider something “adequate”? You compare that to others in a similar position. After investing a lot of energy/time (usually at the cost of energy/time at home), you’ll feel satisfied when you get a wage raise because it’s a recognition that your work is valuable. When the next guy with the same job gets his raise, not because of his effort, but because of a marketing stunt, then this recognition of your hard work loses its meaning. At that point you’ll no longer feel your pay is adequate for the energy and time you spent on your job. This can result in either (a) demanding to increase your wage, or (b) doing less work for the same pay (such as your colleague).

You are trying to inject your own way of feeling about things as mine. Well, they aren’t. If someone gets a raise because of a marketing stunt or whatever it’ll feel scummy, but won’t devalue the fact that I actually earned mine. I do not assign a person a value or worth based on the wage they earn, I assign a person value and worth based on who they are and what they do, so the other guy’s wage simply doesn’t affect how I view my own worth.

1. It actually does devalue your wage. To expand on the school grades example: if all your fellow students receive an A regardless of how well they did on the test, then that A becomes a meaningless number and your diploma loses its value in the market place as it can no longer be used to estimate your value. The same happens with wages but on a larger and perhaps less noticeable scale.

Illogical argument. Grades are there to measure your skill and how well you’ve done, wages aren’t. Wages are, by very definition, payment for work. That’s it, nothing else. [/q]

Actually, one of the reasons many companies don’t publish their salaries is because they know that people might demand more if they discover that colleagues who do the same work are paid more.

[q]2. You felt that your previous pay was adequate for what you did. How do you consider something “adequate”? You compare that to others in a similar position. After investing a lot of energy/time (usually at the cost of energy/time at home), you’ll feel satisfied when you get a wage raise because it’s a recognition that your work is valuable. When the next guy with the same job gets his raise, not because of his effort, but because of a marketing stunt, then this recognition of your hard work loses its meaning. At that point you’ll no longer feel your pay is adequate for the energy and time you spent on your job. This can result in either (a) demanding to increase your wage, or (b) doing less work for the same pay (such as your colleague).

You are trying to inject your own way of feeling about things as mine. Well, they aren’t. If someone gets a raise because of a marketing stunt or whatever it’ll feel scummy, but won’t devalue the fact that I actually earned mine. I do not assign a person a value or worth based on the wage they earn, I assign a person value and worth based on who they are and what they do, so the other guy’s wage simply doesn’t affect how I view my own worth.

This isn’t his own way of thinking. This is the way the world works. When employees know they are more valuable than the next employee, they demand more than them. That is why the best sportspeople are paid the most amount of money. It’s not like they would be struggling on lower wages. Even in a sport like basketball, where they sometimes accept lower wages compared to the maximum they could have gotten, they still insist on being the best paid on their teams because it obviously matters.

Illogical argument. Grades are there to measure your skill and how well you’ve done, wages aren’t. Wages are, by very definition, payment for work. That’s it, nothing else. [/q] It really isn’t. Wages are a measurement of your value on the market place. It determines how much (perceived) value you can produce with your knowledge, skills, energy and time. As soon as someone offers an equal job that pays better, that means that this person either values you more than your current employer does, or your current employer isn’t paying you enough. Consequently, when an employer pays your colleague the same as you, that would imply that the employer values your colleague’s output just as much as yours or he isn’t paying you enough.

Furthermore, when all wages go up, so will the cost of living. It’s one of the reasons linking wages to the inflation index (such as here in Belgium) is frowned upon, it will create an inflation spiral: wages go up, cost of living too, index goes up again. We can get away with it because the rest of Europe doesn’t do it. This keeps the increased costs smaller than the increased wages (in other words, we get a little bit richer while the rest of Europe becomes a little bit poorer). It does hurt our ability to compete though.

[q]You are trying to inject your own way of feeling about things as mine. Well, they aren’t. If someone gets a raise because of a marketing stunt or whatever it’ll feel scummy, but won’t devalue the fact that I actually earned mine. I do not assign a person a value or worth based on the wage they earn, I assign a person value and worth based on who they are and what they do, so the other guy’s wage simply doesn’t affect how I view my own worth.

I’m really curious on how you determine that your current salary is ‘adequate’ for the work you put in it.

When a colleague who only does the bare minimum of work gets a raise to my level then that would send a message that actually doing your best is not considered valuable in this company. To the contrary, the guy got more free time/energy to spend on non-work than I do. Depending on my life interests, I’ll either demand a raise or I’ll reconsider my working strategy to also start doing the bare minimum while maximizing my free time/energy. We work as an investment to improve our lives, not the other way around. If they suddenly require less work for the same wage, you’d be a fool not to make use of that so you can have a better private time.

1. It actually does devalue your wage. To expand on the school grades example: if all your fellow students receive an A regardless of how well they did on the test, then that A becomes a meaningless number and your diploma loses its value in the market place as it can no longer be used to estimate your value. The same happens with wages but on a larger and perhaps less noticeable scale. [/q] Wrong. Neither your wage nor your work is devalued. Regardless of anyone elses pay, you have already been rewarded for your work. You are not taking a cut in pay and should you decide to leave, potential new employers will ask what your previous pay was, not your co-workers. The only negative “you” experience when co-workers are given a raise is hurt feelings because you think you should decide what their pay be rather than their employer.

[q]2. You felt that your previous pay was adequate for what you did. How do you consider something “adequate”? You compare that to others in a similar position. After investing a lot of energy/time (usually at the cost of energy/time at home), you’ll feel satisfied when you get a wage raise because it’s a recognition that your work is valuable. When the next guy with the same job gets his raise, not because of his effort, but because of a marketing stunt, then this recognition of your hard work loses its meaning. At that point you’ll no longer feel your pay is adequate for the energy and time you spent on your job. This can result in either (a) demanding to increase your wage, or (b) doing less work for the same pay (such as your colleague).

First, this isn’t a marketing stunt and anyone who doesn’t understand that is completely naive. Aside of that, people are perfectly capable of determining their own self-worth without using other people as a measuring stick. Let me prove it to you… I have a 3000 sqft. yard that needs to be mowed. If I offer you $10 to do it, do you feel that’s adequate pay? You will have no problem coming to an answer because you are capable of evaluating the labor & cost involved. Most people will conclude $10 is not adequate pay. Where I to offer $100 for the job, the reverse would be true.

Anyone who feels devalued by the compensation that someone else receives is nothing more than insecure. They’ve allowed their feelings or ego to get in the way. It’s like a penis measuring contest that you like only when you’re one of the biggest, but immediately start whining about when that’s no longer the case. Get over it. The only thing hurt by everyone getting bumped to $70k/yr minimum is the ego of those who prefer the social and economical gaps stay in place.

Lower and middle class pay here is a joke. To rub salt into that wound what pay they do get is then overtaxed so the rich & greedy can become more so. History shows us over and over and over that when you decimate the middle class, and the gap between the haves and have-nots widens too far, you sentence yourself to your own demise. Looking at the last 20,30,40,50 years in this country, the writing is on the wall should be obvious to anyone with their eyes open.

Wrong. Neither your wage nor your work is devalued. Regardless of anyone elses pay, you have already been rewarded for your work. You are not taking a cut in pay and should you decide to leave, potential new employers will ask what your previous pay was, not your co-workers. [/q] If everyone’s wage would be risen to yours regardless of their productivity, then your costs will rise with it (inflation). In that sense your work is devalued because your own wage didn’t increase either.

As a note aside, potential new employers have no right knowing what my current wage is. They can know my expectation for the new job.

Let me prove it to you… I have a 3000 sqft. yard that needs to be mowed. If I offer you $10 to do it, do you feel that’s adequate pay? You will have no problem coming to an answer because you are capable of evaluating the labor & cost involved. Most people will conclude $10 is not adequate pay. Where I to offer $100 for the job, the reverse would be true.

Your example works because the job itself is not worth $100. People who earn less than $100/job_duration will gladly do it.

Now let’s suppose your job would normally cost $40/hour but you offer to pay only $20/hour. I’m sure you’ll find some people who are willing to do it as a one time side job for that price (albeit probably with a less desirable result than an experienced craftsman). I’m also sure that once those people repeatedly do this job, they’ll start steadily increasing their price to something a lot closer to the $40/hour. Why? Because they can. If you don’t pay that, then someone else will for a similar job, otherwise the job wouldn’t normally cost $40/hour.

People are only willing to work below their wage standard for so long. Especially when the cost of living goes up (both by inflation and by their personal living standard).

[q]The only thing hurt by everyone getting bumped to $70k/yr minimum is the ego of those who prefer the social and economical gaps stay in place.

If the minimum wage would suddenly become $70k/year, then a dollar would instantly drop to about 1/4 of what it’s worth now and everyone would be on the equivalent of the current minimum wage again while those who are more productive will move elsewhere.

It’s been tried several times before, it’s called communism. The poor stayed and many of the more productive members of society such as industrials and scientists fled to a country that was more willing to pay according to value. As long as we have to deal with scarcity, a system such as this will never succeed. Human nature simply doesn’t work that way.

Wrong. Neither your wage nor your work is devalued. Regardless of anyone elses pay, you have already been rewarded for your work. You are not taking a cut in pay and should you decide to leave, potential new employers will ask what your previous pay was, not your co-workers.

If everyone’s wage would be risen to yours regardless of their productivity, then your costs will rise with it (inflation). In that sense your work is devalued because your own wage didn’t increase either. [/q]

What cost goes up? If a company elects to use some of their profit margin to increase employee pay, there is no cost that goes up. How/why exactly you connect that to anyones pay who isn’t raised is beyond me. Maybe you can clarify.

Your example works because the job itself is not worth $100. People who earn less than $100/job_duration will gladly do it.

Now let’s suppose your job would normally cost $40/hour but you offer to pay only $20/hour. I’m sure you’ll find some people who are willing to do it as a one time side job for that price (albeit probably with a less desirable result than an experienced craftsman). I’m also sure that once those people repeatedly do this job, they’ll start steadily increasing their price to something a lot closer to the $40/hour. Why? Because they can. If you don’t pay that, then someone else will for a similar job, otherwise the job wouldn’t normally cost $40/hour.

My example works because it’s based on a simple truth – people are able to determine their own worth without comparison to others. You can alter the numbers all you like or try to making it more complicated than it is but that fact will not change.

People are only willing to work below their wage standard for so long. Especially when the cost of living goes up (both by inflation and by their personal living standard).

Person1 who was already making $70k/yr was not being underpaid. If the janitors pay goes from $15k/yr to $70k/yr, Person1 is still making $70k/yr and is not magically underpaid all of a sudden. Person1 wasn’t working below `their wage standard`, the janitor was. So the janitor is lifted from poverty and Person1 has a problem with that. Says a whole lot about Person1…

The only thing hurt by everyone getting bumped to $70k/yr minimum is the ego of those who prefer the social and economical gaps stay in place.

If the minimum wage would suddenly become $70k/year, then a dollar would instantly drop to about 1/4 of what it’s worth now and everyone would be on the equivalent of the current minimum wage again while those who are more productive will move elsewhere. [/q]

The only way worker pay increases would cause a devaluing of the dollar is if you paid for it by printing new money. That is absolutely not what’s happening here and you are absolutely wrong that by raising the minimum wage causes the dollar to lose value.

[q]It’s been tried several times before, it’s called communism. The poor stayed and many of the more productive members of society such as industrials and scientists fled to a country that was more willing to pay according to value. As long as we have to deal with scarcity, a system such as this will never succeed. Human nature simply doesn’t work that way.

Where in the world are you getting your info from? This is not communism. All I can suggest is that you do some reading on this subject and become better informed.

Listen to what you’re saying… That “adequate pay” is determined by what other people make doing other jobs. That being paid $70k+/yr to do jobX is fine as long as the janitor is paid less. The second the janitor starts making $70k/yr, jobX is magically underpaid all of a sudden. It’s absurd. The value of jobX is not based on the value of jobY regardless of what jobY is.

What cost goes up? If a company elects to use some of their profit margin to increase employee pay, there is no cost that goes up. How/why exactly you connect that to anyones pay who isn’t raised is beyond me. Maybe you can clarify. [/q] I’ve given this example before, but I’ll repeat it here: in Belgium there is the wage indexation. Every year products get a bit more expensive (aka normal inflation just like in any other country). If wages remain the same (i.e. there was no productivity increase), then this would reduce the purchasing power. So what is Belgium’s solution? Force companies to increase the wages each year (at the cost of companies, so no money printing), tied to the inflation index. Turns out, increasing wages while the productivity didn’t, is a bad idea as the consumer prices simply went up again in response. So to diminish the inflation spiral, they adjusted it to a “health index” which is basically the increased cost of life essential items rather than the whole economy. Inflation still goes up, but not as fast.

This measure also works because the rest of the Eurozone acts as a buffer. Our wages automatically go up while the rest of Europe stays the same. However, as Europe is large enough, consumer prices in Belgium will increase less than they would have if Belgium had its own currency. So yeah, our inflation causes a very small raise in your prices. And if every country did it, it would likely stop working.

The side effect is that our companies have increased operating costs compared to the rest of Europe. Which makes them less competitive as they either have to increase their prices or operate with less profit and hence less money to invest in improvements.

Another, more simple example: I sell expensive watches. Suddenly everyone makes a lot more money. That means a lot more people who previously wanted my watches but couldn’t afford them are now interested in buying my watches. That means the demand goes up so I’ll just ask more until I’m at the new optimal point of units_sold * unit_price again.

So yeah, I’m absolutely correct that prices will increase even though no money is printed.

[q]Listen to what you’re saying… That “adequate pay” is determined by what other people make doing other jobs. That being paid $70k+/yr to do jobX is fine as long as the janitor is paid less. The second the janitor starts making $70k/yr, jobX is magically underpaid all of a sudden. It’s absurd. The value of jobX is not based on the value of jobY regardless of what jobY is.

Am I in favour of a 100% free market? No. Contrary to what you might think, I actually vote very green/left wing. But I don’t believe in forcing the market, I believe in very carefully and patiently poking it towards a direction that is interesting for society. Anything too brusque, such as this topic, is contra-productive and will self-correct rather quickly: the productive guys leave, the less productive guys stay and the company eventually goes bankrupt leaving the less productive without a job and serious wage cuts for their next similar job. This won’t have a happy ending. (Also, when I mention ‘productive’ I mean contribution to the end profit, either directly or indirectly. E.g. in an engineering company an engineer obviously produces more value than a janitor, though both are required.)

This is an example of one company. The same happened to communist countries in a larger scale to the point that they had to build a wall to keep their citizens in. Sure, the dictatorial regime certainly didn’t motivate people either, but you’d need a dictatorial regime to enforce such an economy in the first place.

Heh, I’ll give you one more Belgian example of the downside of increasing the purchasing power for everyone regardless of productivity.

Belgium (and especially the north) has a pretty high population density. That means houses/land is relatively expensive. To help people to afford a house, the government provided a “house bonus” which is some sort of fiscal bonus to be able to buy those houses. It worked for a short while, and then prices went up incredibly fast compared to our neighbouring countries. Since people could afford to pay more, the demand went up and sellers simply increased their prices and the purchasing power problem came back. This was a very unintended and perverse effect of that bonus. The government is getting rid of it now, but the damage is done, and people looking to buy a house now will have to pay even more (because the prices are still higher than before, but the bonus is gone).

I’ve given this example before, but I’ll repeat it here: in Belgium there is the wage indexation. Every year products get a bit more expensive (aka normal inflation just like in any other country). If wages remain the same (i.e. there was no productivity increase), then this would reduce the purchasing power. So what is Belgium’s solution? Force companies to increase the wages each year (at the cost of companies, so no money printing), tied to the inflation index. Turns out, increasing wages while the productivity didn’t, is a bad idea as the consumer prices simply went up again in response. So to diminish the inflation spiral, they adjusted it to a “health index” which is basically the increased cost of life essential items rather than the whole economy. Inflation still goes up, but not as fast.

This measure also works because the rest of the Eurozone acts as a buffer. Our wages automatically go up while the rest of Europe stays the same. However, as Europe is large enough, consumer prices in Belgium will increase less than they would have if Belgium had its own currency. So yeah, our inflation causes a very small raise in your prices. And if every country did it, it would likely stop working.

The side effect is that our companies have increased operating costs compared to the rest of Europe. Which makes them less competitive as they either have to increase their prices or operate with less profit and hence less money to invest in improvements.

Another, more simple example: I sell expensive watches. Suddenly everyone makes a lot more money. That means a lot more people who previously wanted my watches but couldn’t afford them are now interested in buying my watches. That means the demand goes up so I’ll just ask more until I’m at the new optimal point of units_sold * unit_price again.

So yeah, I’m absolutely correct that prices will increase even though no money is printed. [/q] You’re confusing currency value with market value. They aren’t the same thing.

That theory is based entirely on assumptions and doesn’t work well in the real world. People don’t always want the easiest job. There is limited job availability in any position. Most people don’t make employment decisions based solely on pay. I don’t know anyone making $70k+/yr that would switch places with the janitor if the pay were the same. Why? Because they all like what they do. That’s why they’ve invested what they have to get those positions.

Countries succeed when its people succeed. The more people able to come out of poverty, the better it is for the whole. When people are making more money, currency value is increased. The economy gets stronger. So, to the insecure people who want to whine about the janitor getting a huge raise, I say get over it and yourself. The greater good is more important than your ego.

You’re confusing currency value with market value. They aren’t the same thing. [/q] They’re strongly related however. Feel free to explain what that means in practice to the citizens. I’m interested to learn where my rationale goes wrong.

Most people don’t make employment decisions based solely on pay. I don’t know anyone making $70k+/yr that would switch places with the janitor if the pay were the same. Why? Because they all like what they do. That’s why they’ve invested what they have to get those positions.

Isn’t that based on assumptions as well? People don’t just take a job because it’s fun, they do it because it pays the bills. Obviously not everyone would switch jobs as janitor (and whatever job becomes more attractive), but a percentage definitely would.

[q]Countries succeed when its people succeed. The more people able to come out of poverty, the better it is for the whole. When people are making more money, currency value is increased.

I just don’t think that’s the whole picture. It depends on the export/import relation of said country towards other countries. Unless you have something the world really wants (such as oil or gas), giving everyone a huge raise will just make you less competitive and raise prices. That huge raise must be paid from somewhere. Those who contribute more will move to other countries for getting better opportunities and you’ll end up with inflated wages compared to your production. I’d rather suggest to slowly raise wages proportionally to mitigate this effect and let the other countries keep up.

You’re confusing currency value with market value. They aren’t the same thing.

They’re strongly related however. Feel free to explain what that means in practice to the citizens. I’m interested to learn where my rationale goes wrong. [/q]

That’s actually outside the scope of this subject. You’ll see why further down.

[q]Most people don’t make employment decisions based solely on pay. I don’t know anyone making $70k+/yr that would switch places with the janitor if the pay were the same. Why? Because they all like what they do. That’s why they’ve invested what they have to get those positions.

Isn’t that based on assumptions as well? People don’t just take a job because it’s fun, they do it because it pays the bills. Obviously not everyone would switch jobs as janitor (and whatever job becomes more attractive), but a percentage definitely would. [/q]

Pay is a part of it, I simply pointed out that for most people it’s not the only consideration. And I don’t know anyone with advanced degrees or in a high paying job who would swap places with a janitor if they could make the same amount of money. I’m sure there is someone somewhere who would but those people are most certainly a minority.

[q]Countries succeed when its people succeed. The more people able to come out of poverty, the better it is for the whole. When people are making more money, currency value is increased.

I just don’t think that’s the whole picture. It depends on the export/import relation of said country towards other countries. Unless you have something the world really wants (such as oil or gas), giving everyone a huge raise will just make you less competitive and raise prices. That huge raise must be paid from somewhere. Those who contribute more will move to other countries for getting better opportunities and you’ll end up with inflated wages compared to your production. I’d rather suggest to slowly raise wages proportionally to mitigate this effect and let the other countries keep up.

It really is that simple because of one important fact you’re ignoring. The company is willing to take a portion of their profit and redirect it into employee pay. This has no affect on their pricing. It has no affect on their competitiveness. It’s actually not much different from companies who give out bonuses because they had a good year. It’s not the employer giving out raised and making the customer pick up the tab. It’s the employer saying we make enough money that we can afford to pay our employees better, and then actually doing it.

If you know of a single case in history where a company investing in its own employees using its own profits caused a devaluation of the currency, a reduction in purchasing power, or decreased competitiveness, I’d love to read about it.

And I don’t know anyone with advanced degrees or in a high paying job who would swap places with a janitor if they could make the same amount of money. [/q] Well there are a whole lot more jobs below $70k/year than janitors. I’ve done some of those ‘less advanced’ jobs as well and to be honest, they’re not nearly as bad as one might think. You clock in at X, you leave at Y, job’s done for the day. No annoying phone calls, no problems that you take home, no overtime, no deadlines with crunch periods, doesn’t cost much mental energy which actually allowed me to work on my own projects in the evening. Sure, the actual work is not always ‘fun’, but neither is an advanced degree job. We all have to do things we don’t like. The difference is that at the end of the day, you can go home and completely forget work. If I’d get 70k/year for that, I’d seriously consider it. When I do grow tired of it (just like with high degree jobs), I can always find other work.

The company is willing to take a portion of their profit and redirect it into employee pay. This has no affect on their pricing. It has no affect on their competitiveness.

I’m sorry but that is wrong. Less profit means less money to invest, less money to expand, less money to do research, less money to hire or pay really qualified people. Less money to increase efficiency and output which will make your product/services less interesting than those of your competitors.

Yeah sure the shareholders will get a smaller profit as well. That also means investors such as organisations that take care of your savings, retirement funds and insurances, which in Belgium are often pretty social (i.e. set up by unions, towns, government etc). It’s also less profit to pay taxes from.

You could argue that this isn’t the case here because the CEO makes less and whose wage isn’t considered part of the profit, but it would still make you less competitive than another company whose CEO also makes less but of which employee salaries were not inflated and hence has more profit.

[q]If you know of a single case in history where a company investing in its own employees using its own profits caused a devaluation of the currency, a reduction in purchasing power, or decreased competitiveness, I’d love to read about it.

Perhaps we’re simply arguing about something different. One company won’t effect much because there are enough to act as a buffer (just like with the wage index in Belgium), if many did so, then those companies either go bankrupt, get overtaken by multinationals (and lose control) or move to another country – unless the government somehow compensates for the profit losses.

Such as happened in Greece, where on average people got paid way more (directly and indirectly, like the very low retirement age) than their productivity on the market warranted. It was subsidised by government loans. Eventually it collapsed and the system started self-correcting. They had the Euro as buffer, which has been dropping since the crisis started in 2008. If Greece were to switch back to the Drachma, it would be worth next to nothing. Though that would make them cheaper and thus more interesting for foreign investments which could reboot their economy. Although I’m far from a well-informed expert on that.

I’m sorry but that is wrong. Less profit means less money to invest, less money to expand, less money to do research, less money to hire or pay really qualified people. Less money to increase efficiency and output which will make your product/services less interesting than those of your competitors. [/q] That’s 100% based on assumption and not real world data. The only way what you’re claiming could be true is if a company uses 100% of their profit for the things you list. No company does. It’s simply not true that giving employees raises automatically means less for expansion, new payroll, increasing efficiency, etc.

Yeah sure the shareholders will get a smaller profit as well. That also means investors such as organisations that take care of your savings, retirement funds and insurances, which in Belgium are often pretty social (i.e. set up by unions, towns, government etc). It’s also less profit to pay taxes from.

That depends, are you referring to net profit or gross profit? And yes, shareholders may ultimately get less – or they may not, it all depends. My family owns a bit of various stocks and I’m perfectly ok with getting less if it means employees are making more. There are a great number of people who are willing to give up a little for the greater good.

You could argue that this isn’t the case here because the CEO makes less and whose wage isn’t considered part of the profit, but it would still make you less competitive than another company whose CEO also makes less but of which employee salaries were not inflated and hence has more profit.

This again is another assumption with no basis in reality. You can’t simply ignore the most important part. That a company is willing to make less profit in order to pay their people better. Again, doing so does not automagically make them less competitive. I doesn’t have any affect on their competitiveness what-so-ever because the raises are paid for from profit, not from pricing. An example could be:

Two companies make competing products. They both have similar profit margins, say 15%. Company A keeps all 15%, while Company B invests 3% back into payroll. How does that suddenly make Company B unable to compete? It doesn’t. Their production costs haven’t changed. Their pricing hasn’t changed. The only change is Company B’s willingness to invest a portion of their profit back into their workforce while Company A puts it all in the bank instead.

[q]If you know of a single case in history where a company investing in its own employees using its own profits caused a devaluation of the currency, a reduction in purchasing power, or decreased competitiveness, I’d love to read about it.

Perhaps we’re simply arguing about something different. One company won’t effect much because there are enough to act as a buffer (just like with the wage index in Belgium), if many did so, then those companies either go bankrupt, get overtaken by multinationals (and lose control) or move to another country – unless the government somehow compensates for the profit losses. [/q]

I don’t think we’re arguing different things. I think the problem here is everything your saying is assumption based on assumption based on assumption, while I look at what actually happens in reality. I’ll gladly suggest we wait and see, revisiting this subject in a year or so. The company will have either experienced a positive or negative outcome at that point and we’ll see whose point-of-view was more accurate.

[q]Such as happened in Greece, where on average people got paid way more (directly and indirectly, like the very low retirement age) than their productivity on the market warranted. It was subsidised by government loans. Eventually it collapsed and the system started self-correcting. They had the Euro as buffer, which has been dropping since the crisis started in 2008. If Greece were to switch back to the Drachma, it would be worth next to nothing. Though that would make them cheaper and thus more interesting for foreign investments which could reboot their economy. Although I’m far from a well-informed expert on that.

What’s going on here and whats happened in Greece have nothing in common.

These ‘assumptions’ are based on real experience we have with the wage handicap in Belgium compared to our competitors/partners in the Netherlands. Less profit is less money that can be invested in the company itself. For many deals you need to invest in stock/hours first and then you get paid after. I really don’t know how to convince you otherwise.

I’m fine with waiting and checking again in a year as our argument will lead us nowhere I’m afraid. It was nice to read your perspective and to think about the questions you raised, so thanks for that.

In Australia it is normal for everyone doing the same job role within a company (or even an industry) to get (roughly) the same salary. We don’t complain about it. If we want more money we apply for a better paying job with more responsibilities or find a more generous employer.

When I graduated from university every employer was offering the same salary (within 10%). The only way to get more money was to gain experience and get a promotion.

I would have thought the bible would be more well-known in the US. Have you never heard the parable of the workers in the vineyard?

Matthew 20:1-16 New International Version (NIV)

The Parable of the Workers in the Vineyard

20 â€œFor the kingdom of heaven is like a landowner who went out early in the morning to hire workers for his vineyard. 2 He agreed to pay them a denarius[a] for the day and sent them into his vineyard.

3 â€œAbout nine in the morning he went out and saw others standing in the marketplace doing nothing. 4 He told them, â€˜You also go and work in my vineyard, and I will pay you whatever is right.â€™ 5 So they went.

â€œHe went out again about noon and about three in the afternoon and did the same thing. 6 About five in the afternoon he went out and found still others standing around. He asked them, â€˜Why have you been standing here all day long doing nothing?â€™

7 â€œâ€˜Because no one has hired us,â€™ they answered.

â€œHe said to them, â€˜You also go and work in my vineyard.â€™

8 â€œWhen evening came, the owner of the vineyard said to his foreman, â€˜Call the workers and pay them their wages, beginning with the last ones hired and going on to the first.â€™

9 â€œThe workers who were hired about five in the afternoon came and each received a denarius. 10 So when those came who were hired first, they expected to receive more. But each one of them also received a denarius. 11 When they received it, they began to grumble against the landowner. 12 â€˜These who were hired last worked only one hour,â€™ they said, â€˜and you have made them equal to us who have borne the burden of the work and the heat of the day.â€™

13 â€œBut he answered one of them, â€˜I am not being unfair to you, friend. Didnâ€™t you agree to work for a denarius? 14 Take your pay and go. I want to give the one who was hired last the same as I gave you. 15 Donâ€™t I have the right to do what I want with my own money? Or are you envious because I am generous?â€™

Funny, my first thought when I read the article was exactly this Biblical parable of the workers. Citing it is not about authority, but literary precedent. Granted, Jesus was making an “insane” comparison between God’s grace and a work-a-day situation his listeners could relate to. That being said, verses 13-15 speak very directly to Mr. Price’s action.

Insane in the sense that one might think a biblical story is a valid argument to sway the debate. It’s no different that “Person A once said so, therefore it’s true”. I should have worded that a bit differently.

I’m sorry, I should have been more clear: When I read the article, I immediately thought of the parable, just like Langalf. And I was very surprised that noone had mentioned it yet. I did not want to imply that it’s necessarily right. But it’s certainly interesting that the bible had to say something about this topic.

I’m not going to read all 130+ comments now – unlike usual, I’m telling myself I don’t have time – sorry if that means I bring less value to the OSnews community and am now worth less, I should probably be paid less. (dock me some commenting allowance perhaps)

this one off story is less interesting in and of itself than taking it as guiding morality tale : “should” we all have the same or roughly the same pay, take pride in all work we do, and if there is a competitive element to having one job vs another – then it would probably be for the most interesting or rewarding jobs (much like academic jobs currently take some of the brightest hardest working people and pay them a relative pittance in return for allowing to work on intriguing or rewarding projects). and assume the sales person who has to put in hours of additional travel time and soak up various additional stresses to (e.g. Yes, the janitor or toilet cleaner or filing clerk, or..) should have reward enough from the shear challenge of it all!! 😉

OR should their be a fair living wage at the bottom rate (.e.g. Â£12 or $20 dollars or â‚¬16 or whatever is chosen)

and a sliding scale of reason wages from Â£20K – Â£250K covering the majority of jobs much as their is now.

there’s no way I’d take the stress of the job I’m doing now if I could get the same salary for doing a menial or unskilled job.

Not that I don’t think they don’t deserve as much as me – not at all – we all deserver a fair minimum. I wouldn’t begrudge them my salary. but if they got my salary – I’d do their job! (instead) – you have to reward for taking on extra (often lengthy) training, same and you have to reward for taking on big responsibilities or stresses. — or why would one bother taking those “higher” positions.

some for reason of interest or challenge, sure perhaps. but for the bigger chunk that don’t have that going for them, you need reward in the form of remuneration.

But – yes – lower paid (indeed all workers) should unionise etc as and when or whereever appropriate. and everyone should demanding fair remuneration and market forces “ought” to sort out rough salary bands. in concert with “decided” salary bands by the HR team in larger organisations. and the government(s) of the world ought strive for fair minimum wages, working rights governing health and safety, and working time directives.

I’m of the slightly left of centre persuasion but i believe in a healthy dose of (regulated) free market forces and capitalism — it’s all about the right balance.

even UK football players should probably have salaries capped at Â£1,500,000 a year (in stead of nearer Â£15,000,000 for some). Currently it would HAVE to be a sliding scales of bands e.g. Â£150,000-Â£1,500,000 in ten major band points CHOSEN AND IMPLEMENTED by the entire premier league club executives/boards – rather than the government as they have no legal framework to impose such salary restrictions in the private sector.

Top(ish) players would still play – but the top few dozen in the world might prefer Italian, Spanish, etc leagues instead. In reality it would be hard to maintain very top flight teams such restrictions.

I guess it’s easier for the viewing and paying public to evaluate the uniquely high performing of a top goal scoring footballer than it is a top performer (or poorly performing) CEO of a large partially publicly owned bank! (with multimillion pounds share options for achieving seemingly low personal goals)

I haven’t been through all 12 pages of comments, but this point hadn’t been made on Saturday when I did read the first four.

Every job I’ve had at a place with enough people in it to require departments has had a couple of rules regarding things like salary and paychecks. The first is that you don’t talk about it with anyone if it’s none of their business. The second is that it is only the business of your supervisor/manager (whichever it is that determines raises be it annually or as deserved) and the Human Resources department (in the event that there’s ever a problem with your paycheck).

With that in mind, I can easily see why people might be upset by Mr. Price’s announcement. He’s suddenly made a single employee’s salary everyone’s business to know, and that’s not cool.